Preamble

The House met at a Quarter before Three of the Clock, Mr. SPEAKER in the Chair.

PRIVATE BUSINESS.

Provisional Order Bills (Standing Orders applicable thereto complied with),

Mr. SPEAKER laid upon the Table Report from one of the Examiners of Petitions for Private Bills, That in the case of the following Bill, referred on the First Reading thereof, the Standing Orders, which are applicable thereto, have been complied with, namely:

London United Tramways, Limited (Trolley Vehicles), Provisional Order Bill.

Bill to be read a Second time To-morrow.

Bridgwater Corporation Bill [Lords],

Read the Third time, and passed, with Amendments.

Gateshead Extension Bill,

Kendal Corn Rent Bill,

Read the Third time, and passed.

Rhyl Urban District Council Bill [Lords] (King's Consent signified),

Bill read the Third time, and passed, with Amendments.

Humber Bridge Bill (by Order),

Third Reading deferred till Tomorrow.

London County Council (Money) Bill (by Order),

Second Reading deferred till Wednesday next, at half-past Seven of the clock.

Oral Answers to Questions — UNEMPLOYMENT.

NATIONAL INSURANCE (SCOPE).

Mr. RHYS DAVIES: 1.
asked the Minister of Labour whether he has considered the resolution sent to him, passed at the Easter Annual Conference of the National
Union of Distributive and Allied Workers, relative to unemployment benefit and to the extension of the scope of the unemployment insurance scheme; and if he will state his attitude towards the requests contained therein?

The MINISTER of LABOUR (Sir Henry Betterton): I have received a resolution protesting against the cut in unemployment benefit and urging the inclusion of all workers under the unemployment insurance scheme, regardless of income. With regard to the first point, I would refer the hon. Member to the reply given to the hon. Member for Hems-worth (Mr. Price) on the 10th March, of which I am sending him a copy, and with regard to the second point, I must await the report of the Royal Commission on Unemployment Insurance.

Mr. DAVIES: Is it the intention of the right hon. Gentleman to send a reply to the secretary of the union?

Sir H. BETTERTON: No doubt the union will see a copy of the answer that I have just given.

ENTERTAINMENT INDUSTRY.

Mr. CRAVEN-ELLIS: 2.
asked the Minister of Labour whether he is aware of the distress now prevailing amongst English actors, actresses, and musicians who have been largely displaced from engagements in this country owing to the admission of alien artistes into Great Britain during a period of depression; and will he exercise greater stringency relative to the admission of alien artistes into Great Britain?

Sir H. BETTERTON: I am aware that there is unemployment among British actors and musicians, but I do not agree that it is due to the admission of foreigners. In my view, the present restrictions on the admission of foreign actors and musicians go as far as is desirable in the interests of British artistes themselves, many of whom, it must be remembered, seek to obtain engagements abroad.

Mr. CRAVEN-ELLIS: Is my right hon. Friend aware that on Saturday last five plays were withdrawn from London theatres, causing extreme unemployment, and that while this is taking place aliens are permitted to come into this country?

Mr. LAWSON: Is it not the case that excessive restrictions in this country may have the effect of damaging the prospects of our people getting employment in other countries?

Sir H. BETTERTON: That is the purport of the answer that I have just given.

LONDON AREA.

Mr. McENTEE: 3.
asked the Minister of Labour whether, in view of the heavy percentage of unemployment in the London area, he is prepared to designate it as a depressed area; and whether he is prepared to discontinue the present practice of making it a condition for grant that men shall be brought in from other districts now designated as depressed, thus causing the dismissal of London men who are already employed?

Sir H. BETTERTON: Although the level of unemployment in certain parts of the London area is regrettably high, it is not such as to justify its inclusion in this schedule, which is limited to areas where unemployment has been especially severe and prolonged and where there is a definite surplus of unemployed workpeople in certain of the heavy industries. As regards the second part of the question, no further schemes carrying the condition referred to are at present being approved for State grant. I am not aware that the introduction of depressed area men in existing schemes has resulted in the dismissal of London men already employed.

TRANSITIONAL PAYMENTS.

Mr. HICKS: 4.
asked the Minister of Labour whether, in view of the delay in hearing cases for transitional payments in the County of London, he will make provision, where the hearing is delayed for two or three weeks, for retrospective payment back to the date of the cessation of unemployment insurance benefit?

Sir H. BETTERTON: I have no evidence of such delay in the County of London. In cases of this class the committees' determinations, both in the County of London and elsewhere, would have retrospective effect under existing provisions, but any interval is usually covered by interim payments or by payments under an interim determination by the committee's officer.

Mr. HICKS: Is the right hon. Gentleman not aware that payment is not made between the period of the determination of standard benefit and the determination of claims under the public assistance committees? If I give him evidence, will he look into it?

Sir H. BETTERTON: I will most certainly look into it, because I want the facts just as much as does the hon. Gentleman, and, if he will give me any case illustrating the point that he has in mind, I will certainly look into it.

LEYTON AND WALTHAMSTOW.

Mr. McENTEE: 5 and 6.
asked the Minister of Labour (1) if he will give the figures of unemployment in the area of the Leyton Exchange for the month of October, 1931, and the figures in the same area for April, 1932;
(2) if he will give the latest unemployment figures for the district covered by the Leyton Employment Exchange and the increase or decrease from the previous month?

Sir H. BETTERTON: At 25th April, 1932, there were 9,883 persons on the registers of the Leyton and Walthamstow Employment Exchange, a decrease of 81 as compared with 21st March. The corresponding figure at 26th October, 1931, was 9,026.

Mr. HERBERT WILLIAMS: Are not these figures published in the index of employment that is placed in the Library, and, if so, is it necessary to put such questions on the Order Paper?

Sir H. BETTERTON: Yes, these figures do appear, I think, in the publication to which my hon. Friend refers.

Mr. LAWSON: Is the right hon. Gentleman aware that the Conservatives, when in Opposition, made excessive use of this same method?

SWANSEA.

Mr. DAVID GRENFELL: 7.
asked the Minister of Labour whether he will give the latest unemployment figures for the Swansea area and the increase or decrease compared with the figures for the previous month?

Sir H. BETTERTON: At 25th April, 1932, there were 15,323 unemployed persons on the registers of Employment Exchanges in Swansea, an increase of 401 as compared with 21st March.

KING'S NATIONAL BOLL.

Mr. SMEDLEY CROOKE: 8.
asked the Minister of Labour if he is satisfied with the present result of the efforts of the King's National Roll Committee in finding employment for disabled ex-service men; and whether he will consider the advisability of appointing a limited number of the disabled to interview employers of labour so as to secure better results?

Sir H. BETTERTON: I am never satisfied, particularly in a matter of this sort, but I think the King's Roll National Council and the local King's Roll Committees have done, and are doing, very valuable work. The percentage of unemployment among disabled ex-service men is, I may say, less than half that among insured men generally. As regards the second part of the question, it is the business of the local King's Roll Committee to suggest the best method of enlisting the support of employers in its particular area.

COMPARATIVE STATISTICS.

Mr. LECKIE: 9.
asked the Minister of Labour whether he can give figures showing how the amount of unemployment pay given in this country, together with the period for which it is given, compares with that paid by the Governments of France, Germany, Italy, the United States of America, the Dominion of Canada, South Africa, and the Commonwealth of Australia?

Sir H. BETTERTON: Particulars of the systems of unemployment insurance in overseas countries and of unemployment relief in Australia and New Zealand were given in the Memoranda published last September as Part IV of the Appendices to the Minutes of Evidence given before the Royal Commission on Unemployment Insurance. The rates and periods vary so much that it is scarcely possible to make a summary comparison of the kind asked for. I should add that since those memoranda were prepared, the period during which ordinary benefit is paid in Germany has been reduced from 26 weeks to 20 and the period during which emergency benefit normally is paid has been increased from 32 to 38 weeks.

ALIENS.

Mr. HALL-CAINE: 11.
asked the Minister of Labour if he is aware that a Rus-
sian subject who can hardly speak English has been substituted at the Russion Oil Products depot at Hamworthy, East Dorsetshire, for a local man, who is now thrown out of work; whether he can state the number of permits to Russian subjects issued in connection with employment by the Russian Oil Products organisation; and whether he will consider preventing British subjects being thrown out of work in circumstances of this nature when they are fully qualified to fill the posts concerned?

Sir H. BETTERTON: I am not aware of the circumstances referred to in the first part of the question. I will gladly have inquiry made if my hon. Friend can furnish me with particulars. In regard to the second part, the number of Soviet nationals now in employment with the Russian Oil Products, Limited, under permit from my Department is 39. I may add that the position is being kept constantly under review.

Mr. SMITHERS: Will my right hon. Friend inquire into the employment of this whole organisation, and is it not a fact that the key men in this industry are appointed, not by knowledge of the oil industry, but solely as Soviet propagandists?

Sir H. BETTERTON: As I have already said, in answer to the original question, I can assure my hon. Friend that this matter is kept constantly under review, and the matter to which he refers is also under review.

Mr. LOGAN: Will the right hon. Gentleman make inquiry into Chinese, instead of English sailors, being placed in English ships?

Vice-Admiral TAYLOR: 13.
asked the Minister of Labour how many German instructors there are at the B.C.N. radio factory, Waddon, Croydon; how many British subjects have been trained; and whether he is aware that some of the trainees have been dismissed and their places taken by Germans?

Sir H. BETTERTON: The hon. and gallant Member is perhaps referring to the radio factory of the British N.S.F. Company recently established at Waddon. Permits have been issued for a total of 23 German technicians for the purpose of instructing British workers. The per-
mits are for a period of six months. As the period of training started only a few weeks ago it is not possible yet to state how many British workers have been trained. In regard to the third part of the question I have no reason to suppose that the British persons in training have been replaced by German workers.

BENEFIT (CASUALS).

Mr. D. GRENFELL: 15.
asked the Minister of Labour whether he is aware that unemployed persons are being subjected to the deduction of a day's unemployment benefit when they have been admitted for a night into a casual ward; and if he will take steps to put an end to this?

Sir H. BETTERTON: By Section 8 (3) of the Unemployment Insurance Act, 1920, an insured contributor is disqualified for the receipt of unemployment benefit while he is an inmate of any institution supported out of public funds. I am sending the hon. Member copies of certain decisions given by the Umpire upon the point raised in his question.

Mr. GRENFELL: Is the right hon. Gentleman aware that men who are starting in search of work owing to the shortage of accommodation are sometimes compelled to stay just one night in the casual ward and are therefore penalised in the way stated in the question?

Sir H. BETTERTON: No, I am not aware of that fact, but in any case the hon. Member knows that all questions arising under the Act of 1920 come up before the Umpire, whose decisions are binding on me. Perhaps my hon. Friend wall look at the Umpire's decisions and see if there is any point that he requires to ask me about further.

TRAINING CENTRE, SLOUGH.

Major-General Sir ALFRED KNOX: 17.
asked the Minister of Labour whether his attention has been drawn to the case of Thomas O'Reilly, a native of Ireland, who was brought to Slough in 1931 to undergo a course of instruction as a bricklayer at the Government training centre and has since been convicted of burglary; and whether he will take steps to protect the Slough district from the importation of men of this type?

Sir H. BETTERTON: I have no knowledge of this case. The class of men
admitted to these centres is in general of a good type and I do not think any further special precautions in this connection are either necessary or practical.

Sir A. KNOX: Does not the right hon. Gentleman think that the obvious plan would be to give a percentage of the vacancies in this training centre to local unemployed youths?

Sir H. BETTERTON: I fully appreciate the point that my hon. and gallant Friend has in mind, but I must remind him that the primary object of this centre is to give a chance to men from the very depressed areas in the north and elsewhere.

Sir A. KNOX: But did not this man come from Ireland?

Sir H. BETTERTON: I say that I have no knowledge of the case at all, but, judging from his name, I should think that he probably did.

UNADMITTED CLAIMS.

Mr. LAWSON: 18.
asked the Minister of Labour the total number of persons who are registered as unemployed but receiving neither benefit or transition payments?

Sir H. BETTERTON: At 28th April, 1932, there were 480,438 persons on the registers of Employment Exchanges in Great Britain with no claim admitted either for insurance benefit or for transitional payments. This number included 129,919 uninsured persons, and 67,724 insured persons with claims under consideration.

GERMAN CIRCUS.

Dr. MORRIS-JONES: 19.
asked the Minister of Labour whether any of the organisations which had made representations to him against a permit of entry to this country being given to the Circus Gleich have now withdrawn their objections; and, if so, on what grounds?

Sir H. BETTERTON: Two organisations have withdrawn their opposition to the admission to this country of the Circus Gleich, on account of revised offers of employment made by the Circus.

Dr. MORRIS-JONES: Is the right hon. Gentleman aware that the feeling in Germany and this country is that this circus has not been treated with the
traditional fairness which has always been regarded as characteristic of this country; and, in the changed circumstances, is he prepared to review the situation?

Sir H. BETTERTON: No. I am not. I came to my decision after receiving a deputation which consisted not only of Members of all parties in the House, but of representatives of the industry, both employers and employed, and they were all definite in their opposition to the admission of this circus.

Dr. MORRIS-JONES: Is the right hon. Gentleman aware that, basing their arrangements on the promise of his Department, this organisation has been put to serious damage and loss; and in the circumstances does he not think that he ought to reconsider the position?

Sir H. BETTERTON: I am glad that the hon. Gentleman put that supplementary question, because I want to make it plain that these permits are revocable, and consideration can at all times be given to the effect that they have on employment in this country. In this and every other case the interests of our own nationals must come first.

Sir PERCY HARRIS: I am not questioning the decision of policy, but would it not be wiser for the Department in cases of this kind to make up their minds on the first application instead of misleading people and encouraging them to embark on heavy expenditure?

Sir H. BETTERTON: I must point out that circumstances sometimes change during a rather long period.

Mr. SMITHERS: Is it not a fact that in present circumstances the advent of this circus, while employing a few people, would indirectly put out of employment a considerably greater number?

Oral Answers to Questions — GOVERNMENT DEPARTMENTS.

HOLIDAYS.

Mr. LEES-JONES: 10.
asked the Minister of Labour if he will state to what holidays per annum civil servants in the Ministry of Labour are entitled according
to their grades; and for what period of such holidays they receive full salary?

Sir H. BETTERTON: As regards the staff of the Ministry, other than Departmental Class Officers, I would refer my hon. Friend to the reply given by the Financial Secretary to the Treasury to the hon. Member for Southampton (Mr. Craven-Ellis) on 5th May. Officers of the Departmental Class are eligible for periods of annual leave corresponding to those for which the clerical and executive grades at headquarters are eligible.

Mr. LEES-JONES: 67.
asked the Financial Secretary to the Treasury to what holidays per annum officers of excise in the Customs and Excise Department are entitled according to their grades; and for what period of such holidays they receive full salary?

The FINANCIAL SECRETARY to the TREASURY (Major Elliot): Subject to the exigencies of the Service, members of the outdoor staff of the Customs and Excise Department are eligible for the following periods of annual leave with full pay:

Officer Grade:
Days.


During first 5 years' service
30


During next 15 years' service
36


Thereafter
42


Surveyor Grade
48


Controlling Grade and Higher Posts
48

Mr. LEES-JONES: Is it a fact that, in addition to these holidays, every Excise officer is expected to take six days' sick leave, whether he is sick or not?

Major ELLIOT: I am afraid I should require notice of any such question as that.

Mr. NUNN: Is it not a fact that the leave now given to the junior ranks, particularly in the Customs and Excise Services, is much in excess of what was given before the War?

Major ELLIOT: I should require notice of that question also.

MINISTRY OF HEALTH.

Colonel GRETTON: 51.
asked the Minister of Health what was the number of the staff employed in the Local Government Board in 1913 and the total
of their salaries in that year; and what was the number of the staff employed by the Ministry of Health in the past year 1931 and the total of the salaries paid in that year?

The MINISTER of HEALTH (Sir Hilton Young): The Local Government Board staff in 1913 numbered 947; the expenditure on salaries was £250,846. The staff of my Department in 1931 was 6,464 with a. salary cost of £1,850,972.

ORDNANCE SURVEY (STAFF).

Mr. T. WILLIAMS: 73.
asked the Minister of Agriculture the number of civilians brought on to the Ordnance Survey in August, 1931, to augment the staff for the purpose of expediting the work of that Department consequent upon the land valuation proposals passed into Law last year by the late Government; the number whose services were dispensed with in January of this year; the number of Royal Engineer officers added to the strength of the Ordnance Survey during the above period; and the number whose services are still retained in that Department?

The MINISITER of AGRICULTURE (Sir John Gilmour): The numbers asked for by the hon. Member are, respectively, 46, 46, 1 and 1.

MINISTRY OF AGRICULTURE.

Colonel GRETTON: 75.
asked the Minister of Agriculture the number of the staff employed by the Ministry in 1913 and of the total of the salaries paid; and the total number of the staff in 1931 and the total of the salaries paid in that year?

Sir J. GILMOUR: The number of non-industrial staff employed by the Ministry in 1913 was 659, and the total of the salaries paid was £131,552. The respective figures for 1931 were 1,640 and £537,199.

Colonel GRETTON: What does my right hon. Friend mean by non-industrial staff?

Sir J. GILMOUR: The figures I have given represent the staff actually on the Ministry's Vote. They are inclusive of the Royal Botanic Gardens, Kew, but exclusive of the Ordnance Survey. The industrial staff are on a separate basis, and are employed at Kew and in connection with things like the National Stud and so on.

Oral Answers to Questions — CHILD EMPLOYMENT.

Mr. D. GRENFELL: 14.
asked the Minister of Labour whether it is the intention of His Majesty's Government to ratify the convention on the age of admission of children to employment in non-industrial occupations?

Sir H. BETTERTON: I would refer the hon. Member to my reply of 12th May to the hon. Member for Wolverhampton East (Mr. Mander) on this matter.

Oral Answers to Questions — POLICE (ADMINISTRATIVE ECONOMIES).

Mr. LEES-JONES: 20.
asked the Secretary of State for the Home Department if he can say when the report of the committee considering economies in police administration will be published?

The SECRETARY of STATE for the HOME DEPARTMENT (Sir Herbert Samuel): This committee was a committee of the Police Council. The whole question of the administrative economies will be reviewed in due course by the Council itself, but it is not contemplated that any report from the committee will be published.

Oral Answers to Questions — SALARIES AND WAGES (PAYMENT).

Lord FERMOY: 22.
asked the Home Secretary whether he will consider some means of suggesting to employers of labour that where possible salaries and wages should be paid by cheque and not in cash, so as to diminish the temptation to theft on a large scale?

Sir H. SAMUEL: I do not think it would be practicable for me to give effect to this suggestion.

Oral Answers to Questions — CRIME (TEMPTATION).

Lord FERMOY: 23.
asked the Home Secretary whether he will consider the advisability of issuing to the public through the police a warning against carelessness which facilitates crime, such as the carrying of quantities of jewellery in cases, large sums of money in handbags, insufficient precautions when removing considerable sums wherewith to pay wages, and inadequate protection of shop-window fronts at night?

Sir H. SAMUEL: The publicity which is constantly given in the Press to crimes such as those which the Noble Lord has in mind should prove an incentive to greater carefulness, but I will give consideration to his suggestion, in consultation with the Commissioner of Police for the Metropolis.

Oral Answers to Questions — CONVICTIONS FOR MURDER.

Mr. McGOVERN: 25.
asked the Home Secretary if he can state how many of the persons convicted for murder since 1916 had served with His Majesty's Forces during the late War?

Sir H. SAMUEL: I regret that I have no statistics which would enable me to furnish this information. It could only be obtained by an expenditure of time and labour with which the value of the inquiry would not be commensurate.

Oral Answers to Questions — LOTTERIES, BETTING AND GAMBLING (ROYAL COMMISSION).

Sir WILLIAM DAVISON: 27.
asked the Home Secretary the terms of reference to the Royal Commission on Lotteries, etc., and the names of the Commissioners?

Mr. BERNAYS: 24.
asked the Home Secretary whether he is now in a position to state the personnel of the Royal Commission on Betting Laws?

Sir H. SAMUEL: His Majesty has been pleased to approve the appointment of a Royal Commission with the following terms of reference:
To inquire into the existing law, and the practice thereunder, relating to lotteries, betting, gambling and cognate matters, and to report what changes, if any, are desirable and practicable.

The Commission will consist of
Sir Sidney Rowlatt, K.C.S. (Chairman);
C. T. Cramp, Esquire;
Lady Emmott;
R. F. Graham-Campbell, Esquire;
W. L. Hichens, Esquire;
The Right Hon. Sir F. S. Jackson, G.C.I.E.;
Sir James Leishman;
A. Maitland, Esquire, K.C.;
Sir David John Owen;
Arthur Shaw, Esquire, J.P.;
Sir Sydney Skinner, J.P.;
Mrs. J. L. Stocks.

Sir W. DAVISON: Can my right hon. Friend say whether the Royal Commission will commence their sittings forthwith?

Sir H SAMUEL: Yes, Sir.

Mr. SMITHERS: Will my right hon. Friend explain the word "cognate"?

Mr. MACQUISTEN: Are there any bookmakers and people acquainted with betting on the Commission?

Oral Answers to Questions — CINEMA CONSULTATIVE COMMITTEE.

Mr. LOVAT-FRASER: 28.
asked the Home Secretary if he will consider the desirability of adding a representative of education to the Cinema Consultative Committee?

Sir H. SAMUEL: As I have explained in reply to previous questions, this Committee is composed entirely of representatives nominated by the authorities responsible for the licensing of cinemas. It is for these authorities to select the persons who appear to be best qualified to perform the duties for which the Committee was constituted.

Oral Answers to Questions — RACECOURSE BETTING CONTROL BOARD.

Sir BASIL PETO: 29.
asked the Home Secretary the cost of the production of the third annual report and accounts of the Racecourse Betting Control Board for the year 1931; and whether, in view of the fact that the profits made by the board have been insufficient for the third year to meet the operating expenses and interest on borrowed capital and have provided nothing for the improvement of the breeds of horses and horse racing, he will arrange that in future the cost of the publication of the report and accounts shall be provided by the Racecourse Betting Control Board and not from public funds?

Sir H. SAMUEL: The report and accounts are presented to Parliament as required by the Racecourse Betting Act, and are printed in pursuance of an order of the House. I have no information as to the cost involved and have no authority to give any directions as to how it should be borne.

Sir B. PETO: 30.
asked the Home Secretary whether he is aware that, although betting through totalisator pools in 1931 reached a total of £3,886,650 2s., an increase of £627,147 10s. over 1930, and in spite of the increased percentage taken by the Racecourse Betting Control Board, the profits of the board from public betting through totalisator pools were insufficient to pay for operating expenses and the interest on borrowed capital and provided nothing for improving the breeds of horses and horse racing; and whether he intends to amend the existing law so as to dissociate the Government from racecouse betting through totalisator pools?

Sir H. SAMUEL: In answer to the first part of the question, I would refer the hon. Member to the Board's report and accounts for 1931, which have been presented to Parliament. As regards the remaining parts of the question, members of the Government are required to perform certain limited functions in connection with this Board by the Racecourse Betting Act, 1928. Any question of amending or repealing that Act is one of the matters which are included in the reference to the Royal Commission on Lotteries and Betting, and must await their inquiry and report.

Sir B. PETO: Will the right hon. Gentleman bear in mind that the consideration put before the House at the time the Act was passed was that it was in the public interest in that this money would be used for improving the breed of horses and for the improvement of horse racing; and, as in the last three years no results have been produced, will he take into consideration the desirability of altering the relationship of the Government to this matter of racehorse betting?

Sir H. SAMUEL: That can only be done by an amendment of the Act, and that must necessarily await the report of the Royal Commission.

Mr. RHYS DAVIES: Do I take it that the Royal Commission which the right hon. Gentleman has just set up will be competent to look into the operations of the Betting Control Board?

Sir H. SAMUEL: Certainly, they will have the question of this Act under their consideration.

Mr. MACQUISTEN: Is not the failure of the Act due to the fact that no advice was taken from men who know about betting? I am not referring to myself.

Oral Answers to Questions — EDUCATION.

SCHOOL AGE.

Captain NORTH: 32.
asked the President of the Board of Education what would be the estimated economy involved by raising the age for admission to elementary schools from five to six years; and whether it is the intention of the Government to take any action on such lines?

The PRESIDENT of the BOARD of EDUCATION (Sir Donald Maclean): Unless legislation was passed excluding all children under six from the schools for all purposes the amount of saving would be difficult to estimate, but would probably be small. On the assumption that such legislation was passed and that no steps were taken to replace the educational and social facilities thus withdrawn, the total saving to the Exchequer is estimated to be about £2,000,000 a year. In some areas, and especially in the counties, an increased burden would be thrown on the rates, as the saving to the authorities in expenditure would be less than the loss in grant. While the effect would vary in different localities, the authorities as a whole would lose to the extent of about £125,000 a year. I have not at present in contemplation any change in the law of school attendance.

Captain NORTH: I thank the right hon. Gentleman for his reply. In view of the fact that some 160,000 children under the age of five are going to school in England and Wales, does he not think that, in the interests of economy, the parents might be asked to pay, or, alternatively, that the children should be prevented from going to school?

Sir P. HARRIS: Do I understand from the reply that, owing to the fact that the building and staff are already in existence, there would be no real economy to the rates and a very small economy to the taxpayers if the course suggested were adopted?

Sir D. MACLEAN: I have already pointed out that local education authorities would not benefit, that, indeed,
they would lose, on balance, to the extent of £100,000 a year. The loss would apply particularly to the county areas where possible economies would generally be small compared with the loss of the per capita grant. In reply to the hon. and gallant Member's supplementary question, I have already indicated that there is no intention of altering the existing practice.

SECONDARY SCHOOLS.

Sir BERTRAM FALLE: 34.
asked the President of the Board of Education whether education authorities who have secondary schools without sixth forms, but possess a municipal college where facilities for this tuition are provided, are required to establish sixth forms in all secondary schools as well as the municipal college in order to be officially recognised by the Board of Education and to render scholars eligible for State scholarships to the universities?

Sir D. MACLEAN: The development in recent years of sixth form work in grant-aided secondary schools, which has resulted in remarkable successes of pupils from such schools at the Universities, is a notable feature of the public system of education, but the absence of such work does not render a school ineligible for recognition by the Board.

Oral Answers to Questions — LOCAL EXPENDITURE.

Mr. HALL-CAINE: 33.
asked the President of the Board of Education whether his department will refrain from pressing the different local authorities to carry out all statutory duties imposed upon them which these local authorities may consider might usefully be postponed in view of the economic situation of the country?

Sir D. MACLEAN: Obviously in my dealings with local education authorities I cannot ignore statutory requirements; but there is generally a considerable element of discretion in questions involving new expediture, and I can assure my hon. Friend that I am not in present circumstances pressing authorities in such matters except in cases of clear need.

Mr. HALL-CAINE: 41.
asked the Minister of Health whether his department will refrain from pressing the
different local authorities to carry out all statutory duties imposed upon them which these local authorities may consider might usefully be postponed in view of the economic situation of the country?

Sir H. YOUNG: The reduction of local expenditure was dealt with in a circular issued last September, of which I am sending my hon. Friend a copy. The action of my Department is in accordance with the principles laid down in that circular, which whilst deprecating a wholesale course of cutting down expenditure whatever be its purpose, requires the careful scrutiny of the whole field of expenditure made necessary by the financial situation.

Oral Answers to Questions — PUBLIC HEALTH.

IMPORTED MEAT (INSPECTION).

Captain RAMSAY: 35.
asked the Minister of Health whether the public health officials are able to carry out satisfactory tests in regard to the boneless meat not in carcase form imported into this country, in view of the fact that the internal organs wherein frequently the only traces of disease exist have been removed from such meat?

Sir H. YOUNG: I am advised that while it may be possible to detect disease in boneless meat, the only satisfactory way of ascertaining that meat is free from disease is by inspection of the whole carcase at the time of slaughter. I am accordingly proposing to amend the Imported Food Regulations so as to require an official certificate of inspection with any imported meat less than the whole of the carcase. I am sending my hon. and gallant Friend a copy of the existing Regulations and the draft amending Regulations.

PREGNANCY (OPERATIONS).

Mr. LOGAN: 37.
asked the Minister of Health how often in the last 12 months under the control of the health authority of the county of London pregnancy has been terminated operatively in cases of tuberculosis; and has the written consent of the parents been sought and obtained

Sir H. YOUNG: I have no information on the subject to which the hon. Member refers.

Mr. LOGAN: Will the right hon. Gentleman make such inquiries as he can?

Sir H. YOUNG: Inquiries would be prolonged and costly, and it is entirely a matter, in the first place, for the discretion of the local authorities.

Mr. LOGAN: If I confine it to the London area, is the right hon. Gentleman prepared to send out a circular saying that he is not in agreement with such murders taking place?

Sir H. YOUNG: I really cannot give any tacit assent to the implication of the hon. Member's supplementary question. If there is any case in which there are circumstances to which the hon. Member thinks attention should be called, perhaps he will favour me with particulars of it.

PSITTACOSIS.

Mr. TEMPLE MORRIS: 38.
asked the Minister of Health whether, in view of the fact that no case of psittacosis has been reported in Argentina for over a year and the inconvenience the present restriction on the importation of parrots is causing the public, he can see his way to modify the present regulations regarding the introduction of parrots into this country?

Sir H. YOUNG: This question is receiving continuous attention in my Department in the light of all the information available on the subject, but I am not satisfied that the risk of the spread of psittacosis through the importation of parrots has so far diminished that the restrictions on their importation, which apply generally and not only to Argentina, could safely be relaxed at present.

Oral Answers to Questions — HOUSING.

BUILDING CONTRACTS (BRITISH MATERIALS).

Sir COOPER RAWSON: 39.
asked the Minister of Health whether, in order to reduce the unemployment among workers in the building material industries, he will insist to a greater extent on the use of British materials in building contracts of public authorities?

Sir H. YOUNG: I would refer my hon. Friend to the reply given to a question on this subject on the 19th ultimo, of which I am sending him a copy.

LOANS.

Sir C. RAWSON: 40.
asked the Minister of Health if he will give particulars of the loans at present sanctioned and applied for, respectively, in connection with housing?

Sir H. YOUNG: The total amount of loans sanctioned for housing purposes in England and Wales since the War is approximately £571,000,000. No precise figures of the amount of borrowing involved by the various proposals before my Department can be given, but the average amount of loans sanctioned for housing purposes in England and Wales in each of the first four months of this year was approximately £1,211,500.

RENT RESTRICTIONS ACT.

Major NATHAN: 43.
asked the Minister of Health whether it is proposed to introduce during the present Session the projected Rents Bill?

Sir H. YOUNG: I would refer the hon. Member to the reply given by the Lord President of the Council yesterday to the hon. Member for Wigan (Mr. Parkinson).

CONSTRUCTION (HOUSING SOCIETIES).

Mr. HAMILTON KERR: 44.
asked the Minister of Health whether he will consider introducing legislation to give Government support to mortgages on houses built by housing societies in order to give a stimulus to construction and provide the type of cheap house which is especially needed?

Sir H. YOUNG: I am afraid I cannot undertake to consider housing legislation at the present time. I may inform my hon. Friend that 130,903 houses were erected without State assistance in the last financial year, this being the greatest number in any year since the War. I am sending him a copy of a recent circular dealing with the type of houses to be provided by local authorities with State assistance.

Mr. MAXTON: Did that extra large construction of houses by private enterprise take place during the term of the late Labour Government?

Sir H. YOUNG: It was in the last financial year.

Mr. HICKS: Can the right hon. Gentleman tell us whether they were houses of the type which rank for subsidy or not?

Sir H. YOUNG: Is the hon. Member referring to the types of houses among the 130,000?

Mr. HICKS: Yes.

Sir H. YOUNG: I am afraid I should require notice of that question in order to give full particulars with an analysis.

CAPITAL COST (LOAN CHARGES).

Mr. ALED ROBERTS: 48.
asked the Minister of Health whether, in view of the fact that in some cases under Section 26 of the Housing Act of 1930 charges incurred during the construction of houses, such as loan charges on the land and interest on money paid to building contractors, are being disallowed in arriving at the ultimate capital cost of the houses, he will make it clear to local government auditors that such charges during construction must be taken into account?

Sir H. YOUNG: There is no authority for the payment out of moneys raised under loans sanctioned for the purposes of the Housing Act, 1930, of charges in respect of interest and repayment of capital.

CENSUS RETURNS.

Major NATHAN: 42.
asked the Minister of Health the present position as to the publication of the report on the Census Returns and, in particular, when he anticipates that the Census particulars as to housing will be published?

Sir H. YOUNG: I cannot at present add to the information contained in my reply to the hon. and gallant Member of the 26th November last, that the County Part series of Census Reports containing housing statistics will begin to issue about the middle of the present year, but that it is impossible to state when publication of all Census Reports will be completed.

Molasses produced during the four seasons 1928–29 and 1931–32.


—
Quantity.
As percentage of throughput of beets.
Subsidy paid or payable.



Tons.
Per cent.
£


Factories making white sugar only
…
…
169,800
3.6
941,100


Factories making raw sugar only
…
…
96,800
3.3
498,400

Oral Answers to Questions — SUGAR-BEET INDUSTRY.

Mr. GROVES: 45.
asked the Prime Minister whether, in determining the composition of the committee to investigate the sugar-beet industry of this country, he will secure that it is judicial in character and contains no member interested in any way in the sugar-beet or any allied industry nor any official from any Government Department responsible for evolving or administering the subsidy scheme?

Captain PETER MACDONALD: 46.
asked the Prime Minister if he can now make any statement as to the composition of the committee that is to investigate the sugar-beet industry; and whether this committee is to consider the question of evolving an imperial sugar policy?

The LORD PRESIDENT of the COUNCIL (Mr. Baldwin): I am not in a position to make any statement on this subject, but the suggestion of the hon. Member for Stratford (Mr. Groves) will be borne in mind.

Captain MACDONALD: Can the right hon. Gentleman say when he will be able to make a statement?

Mr. BALDWIN: No.

Mr. GROVES: 71.
asked the Minister of Agriculture what has been the percentage of molasses produced by the beet-sugar factories making white sugar since the passage of the Finance Act, 1928, as compared with the factories making raw sugar; what has been the tonnage of that molasses; what subsidy has been paid on it; and what was its market value after the subsidy had been paid?

Sir J. GILMOUR: As the answer contains a table of figures, I will, with permission, circulate it in the OFFICIAL REPORT.

Following is the answer:

The information asked for in the first three parts of the question is as follows:

I regret that I am unable to answer the last part of the question, but the prices received by the factories for molasses produced in the three years 1928–29 to 1930–31 averaged roughly £2 6s. 8d. per ton.

Oral Answers to Questions — NATIONAL FINANCE.

ENTERTAINMENTS DUTY.

Mr. McGOVERN: 55.
asked the Chancellor of the Exchequer if he can state the monthly yield of Entertainments Duty on 4d. and 6d. seats in cinemas during each month from April, 1931, to April, 1932, and for the similar period of April, 1930, to April, 1931?

Major ELLIOT: No figures are available showing the yield of Entertainments Duty for particular classes of entertainments. Even if they were, I am afraid that the information asked for by the hon. Member could not be supplied, as the admission prices to which he refers have been chargeable with duty only since 9th November last.

Mr. McGOVERN: Can the right hon. and gallant Gentleman give the figures for that period?

Major ELLIOT: It is not given for a particular class of entertainment, as I have stated in the earlier part of my answer.

BEER DUTY.

Lord APSLEY: 56 and 68.
asked (1) the Chancellor of the Exchequer whether he can estimate the probable loss of revenue to the Exchequer from a total remission of the beer duty applied to beer brewed in the United Kingdom from ingredients, including malting barley, grown entirely in the United Kingdom in the next financial year;
(2) the Financial Secretary to the Treasury whether he can estimate the loss to the Treasury of revenue that would be caused by the remission of the beer tax on beer brewed in the United Kingdom from malting barley and hops grown in the United Kingdom?

Major ELLIOT: It would not be possible to frame any reliable estimate, but I must point out that quite apart from the loss of revenue I fear that any such proposal would be impracticable in view of our obligations under commercial treaties.

Mr. LYONS: 62.
asked the Chancellor of the Exchequer whether he will consider introducing legislation to require the gravity of beer to be indicated on every cask and barrel and on every invoice relating thereto?

Major ELLIOT: I would refer my hon. Friend to the answer which I gave on 28th April to my hon. and gallant Friend the Member for Pontefract (Captain Sotheron-Estcourt).

Captain SOTHERON-ESTCOURT: Can the right hon. and gallant Gentleman indicate to which Department this question should be addressed?

Major ELLIOT: I am afraid that it might create trouble if I indicated what Department I thought ought to do some particular piece of work.

IMPORT DUTIES (PITPROPS).

Earl of DALKEITH: 57.
asked the Chancellor of the Exchequer if he can state the amount of revenue which would be obtainable from a 10 per cent. duty imposed for revenue purposes on foreign pitprops?

Major ELLIOT: Statistics of importations do not distinguish pitprops, which are included with all other classes of pit-wood, and therefore material is not available for framing such an estimate as my Noble Friend desires.

REPARATIONS AND WAR DEBTS.

Mr. LAMBERT: 58.
asked the Chancellor of the Exchequer what is the total of the payments made by and paid to Great Britain on account of War debts and reparations to the latest available date?

Major ELLIOT: The total of the British War debt payments to the United States Government to date is £32(5,200,000. The total of the British receipts from Allied War debts and reparations (including the United Kingdom share of the proceeds of the German Government 5½ per cent. Loan, 1930) is £200,782,000. The deficit (including interest at 5 per cent. on both sides of the account) is about £200 millions.

Mr. LAMBERT: If the British Government have had to pay this amount of money for winning the War, how much
does the right hon. Gentleman consider that we should have received if we had lost the War?

Mr. LAMBERT: 63.
asked the Chancellor of the Exchequer if arrangements are being made to pay to the United States annuities after the expiration of the Hoover moratorium and also the annuities held up during the suspension period?

Major ELLIOT: I would refer the right hon. Member to what was said on this subject by my right hon. Friend the Chancellor of the Exchequer in his Budget Speech on the 19th April, and to the reply given yesterday by my right hon. Friend the Secretary of State for Foreign Affairs to the hon. and gallant Member for the Limehouse Division of Stepney (Mr. Attlee).

Mr. LAMBERT: Are we to understand that no further arrangement has been made for payments to the United States except such as has been stated in this House before?

Major ELLIOT: Yes, Sir, up to the present time.

NETHERLANDS BANK.

Mr. HANNON: 60.
asked the Chancellor of the Exchequer what reply has been sent by His Majesty's Government to the representations from the Dutch Government on the subject of claims made by the Netherlands Bank for recovery from this country of alleged losses through the suspension of the Gold Standard by Great Britain?

Major ELLIOT: The Dutch Government have been informed that His Majesty's Government greatly regretted the loss suffered by the Netherlands Bank as the result of the suspension of the Gold Standard by this country, but that, after the fullest and most sympathetic consideration of all the circumstances of the case, they found it impossible to accord any preferential treatment to the sterling assets of the Netherlands Bank.

Mr. HANNON: Does that mean that, in point of fact, there is no claim of any substance whatever against the British Treasury in this matter and the Netherlands Bank?

Major ELLIOT: Perhaps the hon. Gentleman will read my answer.

Mr. MAXTON: Did the Netherlands Bank receive the apology of the Government in a proper spirit?

INCOME TAX (CO-OPERATIVE SOCIETIES).

Mr. LEONARD: 64.
asked the Chancellor of the Exchequer whether the committee appointed to inquire into the present position of co-operative societies in relation to Income Tax will meet in public or in private?

Major ELLIOT: This is a matter for the committee itself to decide.

Mr. LEONARD: Will the Financial Secretary consider the desirability of giving power under the Tribunals of Inquiry (Evidence) Act or any other special powers?

Major ELLIOT: I should have certainly liked to see that suggestion put down in writing.

Mr. McGOVERN: Will the right hon. and gallant Gentleman consider allowing this committee to broadcast through the talkies?

WAR LOAN (UNCLAIMED INTEREST).

Mr. RHYS DAVIES: 65.
asked the Chancellor of the Exchequer if he can state the number of the present holders of Five per cent. War Loan Stock whose addresses are unknown and to whom therefore interest is not being paid; what is the amount of the stock held by them; and what will become of this unclaimed money?

Major ELLIOT: The number of warrants for payment of the dividend on Five per cent. War Stock due on 1st December, 1931, that are retained to-day is 2,316, representing approximately £500,000 of stock. It would not be possible, without a disproportionate expenditure of time and labour, to say what fraction of this stock is likely to remain permanently unclaimed. As regards the last part of the question, the provisions of the law are shortly as follows: Dividends on Government Stock which are unclaimed for more than five years are transferred to the National Debt Commissioners, and if no claim is received for 10 years the stock itself is so transferred. Every effort is made to trace the holders
and the stock and dividends are retransferred to them on proof of claim. The actual transfers to the National Debt Commissioners in connection with Five per cent. War Loan average less than £4,000 annually for dividends and £2,000 annually for stock.

SURTAX.

Mr. STOURTON: 69.
asked the Financial Secretary to the Treasury the number of incomes upon which Surtax was paid for the year 1930–31; the number of incomes exceeding £5,000 but less than £10,000, exceeding £10,000, £30,000, £50,000, and £100,000, respectively, for that year; and the comparative figures for the years 1920–21 and 1928–29?

Major ELLIOT: No statistics are yet available of the classification of the Surtax assessments for the year 1930–31. My hon. Friend will find a classification of the Super-tax assessments for the year 1920–21 in Table 73 of the 67th Report of the Commissioners of Inland Revenue (Cd. 2227), and of the Surtax assessments for the year 1928–29 (the most recent year available) in Table 63 of the recently published 74th Report (Cd. No. 4027).

Oral Answers to Questions — MOTOR SPIRIT.

Captain STRICKLAND: 59.
asked the Chancellor of the Exchequer what was the total amount of duty-paid motor spirit retained for home consumption during the year ended 31st March, 1932, and during the year ended 31st December, 1931; what amount of duty-paid motor spirit was refined in this country during the same periods; and what is the estimated proportion of the total consumption of motor spirit used otherwise than by mechanically-propelled road vehicles during the same periods?

Major ELLIOT: As regards the first part of the question, the amounts were 1,004,858,000 and 990,466,000 gallons respectively; as regards the second part of the question, the amounts were 148,743,000 and 158,021,000 gallons respectively. These figures refer to "motor spirit" declared as such on delivery for home consumption. As regards the third part of the question, I regret that I am unable to furnish a reliable estimate.

Oral Answers to Questions — ENEMY ACTION CLAIMS.

Sir B. PETO: 61.
asked the Chancellor of the Exchequer whether he is aware that British subjects whose property in Germany was seized by the German Government have received full compensation, and that British subjects whose property in this country was destroyed by bombs or shell-fire have received on the average only about 35 per cent. of its value; the reason for this discrimination; and whether it is the intention of the Government to make full compensation to the latter category from payments received from Germany on the basis of the Sumner Commission's assessments?

Major ELLIOT: The payment of the claims of British nationals on account of exceptional war measures in respect of their property in Germany fall under Part X (Economic Clauses) of the Treaty of Versailles, and were charged upon the proceeds of the liquidation of German property in this country. Claimants in respect of damage by enemy action fall under Part VIII (Reparation Clauses) of the Treaty and have received ex gratia compensation from moniesvoted by Parliament on the scale recommended by the Royal Commission on Suffering and Damage by Enemy Action. It has been repeatedly stated by successive Governments that they cannot ask Parliament to provide further funds at the expense of the general taxpayer to increase the payments already made to such claimants. The sums received from Germany do not, of course, suffice to pay in full all the claims on reparation account.

Sir B. PETO: While thanking the right hon. and gallant Gentleman for the statement he has made, may I ask him to give a specific answer to the question which I put on the paper, namely, whether in the first case the claims of subjects for loss of property in Germany have, in fact, been paid in full; and whether, in the second case, all that British subjects have got for the loss of their property in this country through enemy action amounts to about 35 per cent.?

Major ELLIOT: Yes, Sir. I understand that claims under Part 10 received better treatment than claims under Part 8.

Sir B. PETO: Can the right hon. and gallant Gentleman say what is the reason for this discrimination between the two categories, other than the fact that he has already stated, that one comes under one part and the other under another part?

Major ELLIOT: There were not enough funds to meet in full the claims under Part 8.

Sir B. PETO: Then, although both had equally good claims, one gets payment on one scale and the other gets payment on another?

Oral Answers to Questions — ST. MARY'S SHIPPING COMPANY.

Mr. GROVES: 66.
asked the Financial Secretary to the Treasury whether the St. Mary's Shipping Company, Cardiff, has been, since 1921, a debtor to the inland revenue; if not, when such circumstances ceased; whether he will state to date the actual amount of the taxation liabilities of this company to the Crown; whether this company is still operating; with whom are arrangements made for the settlement of the amounts due to the Crown; and whether he will give a full statement of the arrangements agreed to?

Major ELLIOT: The Commissioners of Inland Revenue are precluded by Statute from disclosing information regarding the liability to taxation of a particular taxpayer. I may, however, say that the taxation liabilities of the company in question have been settled. The company is, I understand, still operating.

Mr. GROVES: Can the Financial Secretary state whether those liabilities have been met?

Oral Answers to Questions — AGRICULTURE.

WHEAT COMMISSION.

Sir C. RAWSON: 72.
asked the Minister of Agriculture what action he is taking with regard to the request of the National Association of Master Bakers, Confectioners, and Caterers to have appointed on the Wheat Commission a representative of the bread-baking industry?

Mr. CHRISTIE: 74.
asked the Minister of Agriculture whether he is in a position to make any announcement with regard to the constitution of the Wheat Commission under the Wheat Act, 1932?

Sir J. GILMOUR: In accordance with the provisions of the Statute, my right hon. Friend the Secretary of State for Scotland, my right hon. Friend the Secretary of State for Home Affairs, and I, acting jointly, are about to appoint the Wheat Commission. We have been fortunate in obtaining the services of Lord Peel as Chairman. The other members of the Commission will be as follows:

As representing the interests of the growers of home-grown millable wheat:

Mr. J. Beard.
Mr. J. G. Harris.
Mr. G. C. Mercer.
Mr. E. W. K. Slade.
Mr. G. M. Strutt.

As representing the interests of millers of flour:

Mr. S. Armstrong,
Mr. W. T. Charter.
Mr. J. A. Shone.

As representing the interests of importers of flour:

Mr. F. T. Collins.

As representing the interests of dealers in home-grown millable wheat:

Colonel E. P. Clarke, D.S.O.
Mr. Herbert Smith.
Mr. A. E. K. Wherry, O.B.E.

As representing the interests of bakers of bread:

Mr. F. Nevill Jennings, M.C.

together with four other representatives of consumers of flour of whom one, at least, will be a Scottish representative and one a representative of Northern Ireland. These further names will be announced as soon as possible.

The Vice-Chairman of the Commission will be Mr. H. D. Vigor, O.B.E., of the Ministry of Agriculture and Fisheries.

IMPOETED POULTRY.

Mr. DREWE: 76.
asked the Minister of Agriculture whether he is aware of the recent abnormal importations of Russian and Dutch table poultry and whether he is prepared to introduce emergency legislation in the interests of the home producer?

Captain HEILGERS: 77.
asked the Minister of Agriculture whether, in view of the recent abnormal importations of Dutch and Russian chickens, he will take steps to protect the home producer from these arrivals of foreign poultry which render the home-produced consignment practically unsaleable?

Sir J. GILMOUR: Although the volume fluctuates considerably from time to time, the information at my disposal does not confirm the statement that recent importaions of table poultry from Russia and the Netherlands have been abnormal. In these circumstances, the second part of the questions does not arise.

Mr. DREWE: Is my right hon. Friend aware that the importation from Russia is going to be sold at from 5d. to 9d. a pound; and does he consider that that is fair to poultry producers in this country?

Sir J. GILMOUR: All I can say is that the matter is receiving my careful consideration.

Sir P. HARRIS: Will the right hon. Gentleman consider poultry eaters as well as poultry producers?

Oral Answers to Questions — SCOTLAND.

ST. KILDA (EVACUATED RESIDENTS).

Mr. McGOVERN: 78.
asked the Secretary of State for Scotland what answer has been given to the applications made by some of the evacuated residents of St. Kilda to be returned to their native territory:; and if he can make any statement on this matter?

The UNDER-SECRETARY of STATE for SCOTLAND (Mr. Skelton): My right hon. Friend has received no applications of the kind referred to by the hon. Member, and, therefore, the remainder of the question does not arise.

ELECTRICAL INSTALLATION, ERROL.

Lord SCONE: 86.
asked the Minister of Transport the result of the inquiry recently held by his Department into the causes of the delay of the installation of electricity by the Grampian Electrical Company into the village of Errol, Perthshire?

Captain AUSTIN HUDSON (Lord of the Treasury): I have been asked to reply. My hon. Friend has received the
report of the inquiry recently made on his behalf into the application of the company referred to for certain wayleaves, and he hopes shortly to be in a position to announce his decision.

Oral Answers to Questions — TRADE AND COMMERCE.

CANADA (IMPOST DUTIES).

Mr. HERBERT WILLIAMS: 79.
asked the Secretary of State for Dominion Affairs whether he is aware that the Canadian Government is imposing upon British goods entering Canada a surtax as a result of the depreciation of the pound sterling in relation to the Canadian dollar; and whether a similar surtax is imposed on goods from other Empire countries with a depreciated currency?

The SECRETARY of STATE for DOMINION AFFAIRS (Mr. J. H. Thomas): Particulars of the duty in question were published in the Board of Trade Journal in the issue of the 8th October, 1931, and details of subsequent modifications have appeared in the journal from time to time. The special duties were extended to Northern Ireland and to the Irish Free State by an Order-in-Council of the 9th May; a notice to this effect appears in to-day's issue of the Board of Trade Journal.

Mr. WILLIAMS: Is the duty extended to all Empire countries with depreciated currencies?

Mr. THOMAS: I do not think it is extended to all. I understand that there are special arrangements between different Dominions.

Mr. WILLIAMS: Do I understand that certain Dominions have entered into agreements with Canada whereby they avoid this surtax; and, if that be so, has the right hon. Gentleman considered the possible consequences?

Mr. THOMAS: I think it is true to say that certain Dominions have entered into agreements. As to the latter part of my hon. Friend's supplementary question, I would say that I am not unmindful of the consequences.

COTTON INDUSTRY (GREAT BRITAIN AND CANADA).

Mr. KERR: 80.
asked the Secretary of State for Dominion Affairs if he will sup-
port the efforts to promote better opportunities for the export trade in cotton goods to Canada of a delegation representative of the British cotton industry entering into discussions with the Canadian cotton industry prior to the Ottawa Conference?

Mr. THOMAS: I am glad to say that, following consultations between the interests concerned, a delegation from the British Cotton Industry is sailing for Canada at the beginning of June. Arrangements have been made, through the intermediary of the High Commissioner in Canada for His Majesty's Government in the United Kingdom and His Majesty's Senior Trade Commissioner in Canada, for meetings between the Delegation and representatives of the Canadian Cotton Industry. The conversations will not be governmental in character, but His Majesty's Government will certainly carefully consider any report which the Delegation may submit to them.

TREATY RELATIONS.

Major NATHAN: 82.
asked the President of the Board of Trade if he is able to state whether His Majesty's Government proposes to take any action to determine or modify any of the existing most-favoured-nation-clause treaties?

Mr. JOHN COLVILLE (Secretary, Overseas Trade Department): It is not at present the intention of His Majesty's Government to take any general action in this direction, but the policy in regard to existing treaty relations with any one country will naturally be determined by the course of any negotiations with that country which His Majesty's Government may be in a position to undertake after the Ottawa Conference.

WAR MATERIAL (EXPORT).

Mr. T. WILLIAMS: 83.
asked the President of the Board of Trade if he will state how many licences he has granted during the past 12 months in connection with the exporting of munitions of war from this country; and the nature of the munitions and the countries to which they were exported?

Mr. COLVILLE: A statement giving this information will take some time to prepare, but I will have one sent to the hon. Member as soon as possible.

Oral Answers to Questions — MALAYA (WILD LIFE).

Mr. CAMPBELL: 81.
asked the Secretary of State for the Colonies if he is aware that Mr. Hubback's final report on the preservation of wild life in Malaya was presented to the Government of the Federated Malay States more than six months ago; and if he can state when it is likely to be published?

The UNDER-SECRETARY of STATE for the COLONIES (Sir Robert Hamilton): The answer to the first part of the question is in the affirmative. I have no information as to date of publication, but am asking the High Commissioner.

Mr. CAMPBELL: Will my hon. Friend take steps to see that the report is published as soon as possible, in view of the importance of the matter?

Sir R. HAMILTON: I may state that the report is in course of printing at the present time.

Oral Answers to Questions — COAL INDUSTRY.

COAL MINES BILL.

Mr. BATEY: 84.
asked the President of the Board of Trade if he can now make a statement as to the intention of the Government relating to mining legislation on hours and wages?

The SECRETARY for MINES (Mr. Isaac Foot): My right hon. Friend who is, unfortunately, unable to be present, has asked me to reply. As the House will be aware, it has always been the view of His Majesty's Government that the problems which will arise in July next, when the Coal Mines Act of 1931 is due to expire, should prove susceptible of solution by agreement between the two sides in the industry. In. the hope of such agreement being reached, the employers were urged some time ago to get into touch with the workmen and explore the possibilities of settlement. Conversations between the two sides have taken place, and both my right hon. Friend and I have done all in our power to find a way out of the difficulties which have arisen. I regret, however, to report that the possibilities of an agreement between the employers and the workmen have now been finally exhausted. In these circumstances, the initiative devolves upon the
Government, and it has been decided to introduce at once a Bill to deal with the situation. The Bill will be in the hands of hon. Members to-morrow. My right hon. Friend will make a full statement upon the Second Reading, which I hope will take place early next week.

Mr. BATEY: As the Minister says in his reply that the two sides are unable to corns to an agreement, will he state why the Government propose to legislate in the interests of the owners as against the miners?

Mr. FOOT: On that I am sure the hon. Member has been misinformed. I have been in touch with the negotiations all through, and any such suggestion has no basis.

Mr. BATEY: Then why are the Government proposing to deal with only Part I of the Act of 1931?

Mr. FOOT: The hon. Member again is misinformed, as he will see when he reads the Bill. It deals with more than Part I, and I suggest that he should await publication of the Bill.

GERMANY (IMPORT RESTRICTIONS).

Mr. LAWSON: 85.
asked the President of the Board of Trade if he has any further statement to make on his negotions with the German Government in respect to the import restrictions on British coal?

Mr. COLVILLE: I am awaiting a reply from the German Government, which is expected very shortly.

Mr. LAWSON: How much longer have we to wait?

Mr. COLVILLE: I believe the reply was dispatched from Germany to-day.

Oral Answers to Questions — POST OFFICE (HALFPENNY MATTER).

Mr. MALLALIEU: 88.
asked the Postmaster-General if he is aware that postal packets bearing only halfpenny stamps are frequently delayed a post in country districts, and that dislocation in business sometimes occurs when such packets contain trade orders; and will he take steps to prevent such dislocation?

The ASSISTANT POSTMASTER -GENERAL (Mr. Graham White): I
understand my hon. Friend to refer to the arrangements (described on page 14 of the Post Office Guide) whereby packets bearing a halfpenny stamp posted after a specified time are not despatched the same day. These arrangements have the effect of relieving the sorting work at the heaviest period of pressure, thus enabling the general night mails to be disposed of punctually and economically, and my right hon. Friend cannot see his way to cancel them. Urgent packets which cannot be posted before the prescribed times receive the same treatment as ordinary letters if prepaid a penny.

Oral Answers to Questions — BRITISH ARMY.

DISCHARGED WORKERS, PIMLICO.

Mr. HICKS: 80.
asked the Financial Secretary to the War Office if he will state the number of workers that have been discharged from the Army Clothing Factory, Pimlico, to date and the number that have been found employment?

The FINANCIAL SECRETARY to the WAR OFFICE (Mr. Duff Cooper): The number of workers discharged from the Royal Army Clothing Factory since the beginning of December, 1931, is 326. I am unable to say how many of these workers have obtained employment, but I am informed that 45 have actually been placed by the Ministry of Labour and 43 others are traced as having passed from the Ministry of Labour's registers into employment.

CLOTHING (EXPERIMENTAL ORDERS).

Mr. HICKS: 90.
asked the Financial Secretary to the War Office whether the experimental orders placed with the trade for making full-dress clothing have been successful; and what decision has been reached with regard to the establishment of a clothing factory at Woolwich?

Mr. COOPER: The experimental orders are not yet sufficiently advanced to enable a decision to be made.

Mr. HICKS: How long does the hon. Gentleman desire to take before he will be able to give an answer?

Mr. COOPER: I desire to take the shortest possible time. It will probably be a month or two.

TIME-EXPIRED MEN (HOUSING ACCOMMODATION).

Mr. GOLDIE: 91.
asked the Financial Secretary to the War Office whether any provision is made by his Department to ensure housing accommodation for married non-commissioned officers and men who on completion of their period of service at regimental depots and headquarters of Territorial battalions are compelled to vacate the married quarters allotted to them; and whether he will take steps to provide such accommodation, either in buildings under the control of his Department or in conjunction with the local authorities concerned?

Mr. COOPER: No special provision is made by the Department for the housing of married soldiers on their discharge, but where suitable quarters in buildings belonging to the War Department happen to be available for letting, preference would be given to ex-soldiers vacating military quarters, who would be allowed to occupy them on short term tenancies at a fair rent.

Oral Answers to Questions — DISARMAMENT CONFERENCE.

Mr. MANDER: 94.
asked the Secretary of State for Foreign Affairs what steps have been taken by the League of Nations to prevent propaganda during the Disarmament Conference by those interests likely to benefit by the continuance of armament expenditure?

The UNDER-SECRETARY of STATE for FOREIGN AFFAIRS (Mr. Eden): The League of Nations possesses no machinery for dealing with propaganda of this character. I may add that His Majesty's Government in the United Kingdom have received no evidence that any such propaganda is being conducted.

Mr. MANDER: Is the hon. and gallant Gentleman aware that the notorious American, William Shearer, has been out at Geneva?

Mr. EDEN: No, I am not aware of it.

Mr. MANDER: 95.
asked the Secretary of State for Foreign Affairs if he will state the present position with regard to the proposal submitted to the Disarmament Conference by the delegation of the United Kingdom with reference to the prohibition of military training of
young people under the age of conscription or voluntary enlistment and education; and whether he will publish its text?

Mr. EDEN: A number of countries having announced that, in view of their domestic arrangements, they must oppose the proposal in the form in which it was at first submitted, the proposal was withdrawn. I do not consider therefore that any useful purpose would be served by giving exceptional publicity to it.

Oral Answers to Questions — CHINA (CAPTURED BRITISH SUBJECT).

Mr. KERR: 96.
asked the Secretary of State for Foreign Affairs whether he has any information as to the capture of the Reverend Henry Ferguson by bandits in Anhui; and whether he has taken any steps in co-operation with the Chinese Government to effect Mr. Ferguson's release?

Mr. EDEN: Mr. Ferguson was captured by Communists on or about 17th May. In response to pressure by the representative of His Majesty's Minister at Nanking, the Chinese Ministry for Foreign Affairs promised to do all they could to secure Mr. Ferguson's release, and suggested that the presence of a British Vice-Consul might assist the local authorities. Mr. Vice-Consul Graham was accordingly sent from Nanking, and I regret to say that while on his way to the scene of Mr. Ferguson's capture he was slightly wounded by a shot fired by a Chinese soldier. His Majesty's Minister has instructed his representative at Nanking to press the Minister for Foreign Affairs to take urgent action for the punishment of the offender. The local agent of the Famine Relief Commission has received a report that Mr. Ferguson has been released, but the report lacks definite confirmation as yet.

Mr. WARDLAW-MILNE: Does not the hon. Gentleman think that these attacks on and disappearances of British subjects in China are becoming too frequent?

Mr. EDEN: My hon. Friend may be sure that the Government view these incidents with the greatest anxiety.

BUSINESS OF THE HOUSE.

Mr. LANSBURY: May I ask the Lord President of the Council what will be the business for next week, and also if he can make a statement with regard to the progress of Government business?

Mr. BALDWIN: On Monday, Coal Mines Bill, Second Reading.

Tuesday, Wednesday and Thursday: The remaining stages of the same Bill.

Friday: Town and Country Planning Bill, Report stage.

On any day, if time permits, other Orders will be taken.

With regard to the right hon. Gentleman's second question, conversations have taken place through the usual channels with a view to meeting what I think was the general wish of the Committee last night, as expressed across the Floor, that the Committee stage of the Finance Bill should be brought to a close at this day's sitting. The remainder of the Amendments and the new Clauses have been carefully considered and, subject to any decision that may be given by the Chair, the following progress is thought to be practicable and reasonable: Clause 24, the Land Values Clause, and the remaining Clauses of the Bill to be concluded by 6 o'clock. Then consideration of the new Clauses will be entered upon, and it is thought that the Committee might reasonably be expected to get to the Debate on the new Clause relating to the Beer Duty not later than a quarter before Ten. The Division on the new Clause will be taken at a quarter before Twelve, and it seems reasonable to expect that the remaining new Clauses and Schedules can be disposed of without sitting unduly late. This is an attempt to arrange business by the common sense of the united House without recourse to the Closure or Guillotine.

Mr. LANSBURY: I should like to say on that that we on our part will do our very best to carry out this arrangement, and we shall rely on good will and the restriction of eloquence in other parts of the House. In regard to the business for next week, I think the Government do not determine when the. Chairman of Committees shall put down Private Bills. The Chairman announced to-day that he would propose to put down the County Council Bill on Wednesday. It would be very unfor-
tunate if any time allotted to the Coal Mines Bill was to be taken in that way and, if it is possible—and I think that in all probability it is—for the Government to have conversations with the Chairman of Committees, they might save time for the Coal Mines Bill. The only other thing I want to put to the right hon. Gentleman is that I am not at all sure that the Report stage of the Town and Country Planning Bill will be got through on Friday. We have a good many Amendments that we want to move.

Mr. BALDWIN: With regard to the right hon. Gentleman's first observation, of course we are entirely in the hands of the House, and there will be no accusations of bad faith, whatever happens. With regard to the second part, I think, after having considered the Bill myself, and with the knowledge that one evening may be taken up, the House will find it to be sufficient time, but I shall, of course, be perfectly willing for any conversations on the subject to take place after the Bill has been seen. I was perhaps not quite clear about Friday. It is designed to start the Report stage of the Town and Country Planning Bill.

Mr. MAXTON: With regard to the agreement that has been come to between the Government and the Opposition, we on these benches see no particular objection to it, but the older Members of the House will appreciate that a very small party can be very disagreeable. The point I wish to ask the Leader of the House is this. There are on the Order Paper two Motions for which no date has been fixed, one by supporters of the Government, dealing with Mr. Justice McCardie and Lord Justice Scrutton—that is by the back bench supporters of the Government—and one by my hon. Friends and myself demanding the recall of the Governor of New South Wales because of his actions there against Mr. Lang and his Government. [Laughter.] The things which strike this House as humorous always interest me. Having regard to the fact that private Members have been deprived of practically all their normal rights in this particular Parliament, would the right hon. Gentleman consider making time available for the discussion of these two important Motions in which there is very wide public interest?

Mr. MICHAEL BEAUMONT: Can the right hon. Gentleman also give us any indication as to how many days he thinks it desirable to allot to the further stages of the Town and Country Planning Bill?

Mr. BALDWIN: I will see how we get on with that Bill. With regard to the question of the hon. Member for Bridgeton (Mr. Maxton), for whose benevolent neutrality I am obliged, concerning the Motion which has just been put down, and which I have not seen, I am not at all clear whether we have any jurisdiction in the case, and while I am making inquiries there will undoubtedly be a general election in Australia which will perhaps decide the question. With regard to the subject put down by my own supporters, I shall wait until I have received requests from them.

Mr. MAXTON: With reference to the last reply, I wish to say to the right hon. Gentleman that, although the matter has been put down by his supporters, he knows perfectly well that it could be put-down by other Members of the House, and that it is not a matter in which only his supporters are interested but the country generally. What does the right hon. Gentleman mean by his reply to the question on Mr. Lang and the New South Wales Government? Should the general election in New South Wales result in the return of a Government with Mr. Lang's point of view, would the British Government then recall the Governor of New South Wales?

Mr. SPEAKER: The question seems to be very hypothetical.

Mr. BUCHANAN: Apart from the question of whether a general election is held in New South Wales or not, a definite action has been taken by a Governor who is appointed by the Government of this country—[An HON. MEMBER: "The King."]—and whose salary is found by the British Government. [HON. MEMBERS: "NO!"] He is certainly appointed by us and is responsible to our Government. [HON. MEMBERS: "No!"] Apart from whether the election decides for one side or the other, is not the action of deposing a Prime Minister of one of the Commonwealth States an issue of some importance to this country, and should it not be discussed?

Mr. BALDWIN: No. Under the present conditions of Dominion status my impression—and I am merely speaking without having referred to the matter— is that now the whole position of Governors is entirely outside the jurisdiction of this House, but I should like to make inquiry upon that point myself.

Mr. HANNON: May I ask my right hon. Friend whether in point of fact the Governor of New South Wales is one of the most popular Governors in the whole of the Empire at the present moment?

Mr. WALLHEAD: Is it not a matter of some importance to the constitutional position of the Government—

Mr. SPEAKER: But we cannot debate it now.

Mr. MAXTON: The right hon. Gentleman tells us that neither he nor the Secretary of State for Dominion Affairs is sure of the constitutional position. In those circumstances, I do not press him for an answer, but should it be proved that these Governor-Generals are responsible to this House will he consider giving the House an opportunity of discussing the matter?

Mr. BALDWIN: If the hon. Gentleman will be good enough to put down a question, I will see that the matter is looked into and an answer given on the subject.

Motion, and Question, "That the Proceeding on the Finance Bill have precedence this day of the Business of Supply," put, and agreed to.—[Mr. Baldwin.]

COAL MINES BILL.

"to continue Part I of the Coal Mines Act, 1930, and section one of the Coal Mines Act, 1931," presented by Mr. Runciman; supported by the Attorney-General and Mr. Isaac Foot; to be read a Second time upon Monday next, and to be printed. [Bill 89.]

MESSAGE FROM THE LORDS.

That they have agreed to,—

North Eastern Electric Supply Bill,

Scarborough Gas Bill, with Amendments.

That they have passed a Bill, intituled, "An Act to extend the limits of supply of the Gas Light and Coke Company; to
empower that Company to execute certain works and to acquire certain lands; to confer various powers upon that Company; and for other purposes." [Gas Light and Coke Company Bill [Lords].]

And also, a Bill, intituled, "An Act to empower the Port of London Authority to acquire lands and to borrow further moneys; and for other purposes." [Port of London (Various Powers) Bill Lords].]

GAS LIGHT AND COKE COMPANY BILL [Lords].

PORT OF LONDON (VARIOUS POWERS) BILL [Lords].

Read the First time; and referred to the Examiners of Petitions for Private Bills.

RATING AND VALUATION (No. 2) BILL [Lords].

Read the First time; to be read a Second time upon Tuesday next, and to be printed. [Bill 90.]

Orders of the Day — FINANCE BILL.

Further considered in Committee. [Progress, 25th May.]

[Captain BOURNE in the Chair.]

CLAUSE 24.—(Suspension of land value tax.)

The DEPUTY-CHAIRMAN: Before I call upon the hon. and gallant Member for Tiverton (Lieut.-Colonel Acland-Troyte) to move the Amendment standing in his name, I think it would be for the general convenience of the Committee if we took a discussion on the Amendment to cover the points either of the repeal or suspension of the Land Tax, or for the suspension for a longer or a shorter period. That covers the Amendment standing in the names of the hon. Member for Caerphilly (Mr. Morgan Jones) and the hon. Member for Limehouse (Mr. Attlee). The discussion will not predudice the right of the hon. Members to take a Division upon their Amendments if they so desire. The other two Amendments on the Clause, namely, that in the name of the hon. and learned Member for Norwood (Sir W. Greaves-Lord), and that in the name of the hon. Gentleman the Member for Aberdare (Mr. G. Hall) raise slightly different points, and I hope to be able to call them, but I will, first of all, call upon the hon. and gallant Member for Tiverton to move his Amendment.

Lieut.-Colonel ACLAND - TROYTE: I beg to move, in page 15, line 37, to leave out from the word "year," to the word "and," in line 40.
The object of my Amendments is to repeal Part III of the Act of last year. I do not wish to reopen the general controversy of the whole question of the land taxes which was discussed last year. I suppose that every Member of the Committee has already made up his mind about them as to be able to decide whether he thinks they are good or bad. We regard them as thoroughly bad, and the only question which can arise upon my Amendment is whether Part III of the Finance Act of last year shall be completely abolished or only postponed. This part of the Finance Act was brought in by a moribund Government. It was not brought in with any idea of equity or for the benefit of the revenue. It was brought in to try and obtain the
support of the Liberal party in order that the Government might continue its miserable existence a few weeks longer. It was also brought in with the idea of hiding the fact that the Budget of last year was an unbalanced and a dishonest Budget. The Chancellor of the Exchequer of that time was completely bereft of any plans to get the Budget properly balanced. He also wished to hide the fact that Free Trade had nothing further to contribute in helping the finances of the country. Everyone knew when it was brought in that the Government was tottering to its fall. Everyone thought that as soon as the election took place and a new Government was returned the Land Tax would immediately be abolished. The Lord President of the Council, speaking on 13th June, said:
I can say one thing about it—that if we get back to power, that tax will never see daylight.
Speaking on 18th June, he said:
I am not alarmed about the Land Value Tax, because I do not believe that tax will ever come into existence. If we come in, it certainly will not.
4.0 p.m.
The present Government, instead of fulfilling expectations we all held, have tried to fob us off by simply postponing the operation of this tax. If they think they can satisfy us with that, I say that we are by no means satisfied, and will not be satisfied until these provisions are removed from the Statute Book. If not successful this year, we shall try again next year, when, I hope, we shall be successful. As long as these taxes remain on the Statute Book, they can be put into force in a very short time and with practically no Debate. They are causing great uncertainty and difficulties with regard to mortgages and things of that sort. In addition, a sum of, I think, £10,000 is thrown away annually under Part III of the Finance Act, and although the Chancellor of the Exchequer does not regard it as a very large sum, yet in these hard times a sum of £10,000 is certainly worth saving.
I could quote a large number of extracts from speeches of Members of the Conservative party who now sit on the Front Bench to show what the Conservative party thought about this Measure when it was brought in last year, and which back benchers still think, but on which some Front Benchers seem to have changed their mind. I will quote one ex-
tract from the right hon. Gentleman the Chancellor of the Exchequer, who, I am sure we are all very sorry indeed, is not here to-day. We all sympathise very much with him in his illness. I am particularly sorry that he is not here, because I feel certain, after the speech he made last year against these taxes, we should get his support for their abolition. On 19th May last year, the Chancellor of the Exchequer was talking about the damage done by the tax. He said:
No one knows how much that depreciation is going to be, and I am perfectly certain that the doubts, the uncertainties and the anxieties that people will feel about what the effect of these proposals is going to be will have just the same effect upon housing development as the disastrous proposals of the right hon. Member for Carnarvon Boroughs in 1909–10, when the increase in new houses was brought down from an annual average of 119,000 to only a little over 72,000.
May I remind the Committee that as long as this Measure remains on the Statute Book, those uncertainties and anxieties, about which the right hon. Gentleman spoke, will remain? Further on, in the same speech, he said:
As our discussions go on it becomes more and more apparent that the real object of the right hon. Gentleman and hon. Gentlemen opposite is the nationalisation of the land by confiscation. The only thing is that they have not the courage to say so."—[OFFICIAL REPORT, 19th May, 1931; cols. 1810–14, Vol. 252.]
That being so, why have our present Government not the courage to do away with the taxes altogether? It will be remembered that we fought these taxes with all our power, hut under very difficult conditions, because the Government at that time were afraid to face discussion, and put on a very drastic Guillotine. The result was that a large number of most important points were never discussed at all. It is not my idea of fairness or equity to put on special taxation and cause special hardship to one class of taxpayer, and not allow that taxation to be properly considered or properly discussed. I want the Lord President of the Council to realise that we regard this definitely as a matter of principle. We are prepared to put up with a great deal from the present Government in order to support the National Government and keep them in power. If these taxes had anything to do with producing money for revenue
this year, we would put up with them, but they will not produce a penny to the Revenue this year. Although we may be prepared to accept taxation which we consider unjust and unfair, in order to balance the Budget, that does not apply in this case.
There has been an agreement in the Cabinet to differ on Import Duties and tariffs: Why should they not agree to differ on this matter? Why should not the Conservative and Liberal Members of the Cabinet who desire to see these taxes abolished insist on their rights? If any Member of the Cabinet refuses to accept the decision and resigns in consequence, let him resign. If one or two resign it will not be very much loss. When we consider the events of the last few months in connection with the Import Duties, I do not think the right hon. Gentleman need be afraid of losing many of his colleagues. I beg the right hon. Gentleman to consider his own reputation. We value his reputation very highly. He knows perfectly well that it would be right to abolish these taxes altogether, and I ask him to do so and accept the Amendment in my name If he feels that he cannot accept it right away, I ask him to leave it to a free vote of the Committee. The late Government very seldom allowed a free vote, and the present Government only allowed it once on the question of Sunday cinemas. Surely a National Government representative of all parties ought to allow a free vote on a matter of this sort. I not only ask it; I demand a free vote. It does not affect the Revenue in any way, or the balancing of the Budget. The only thing it may affect is the pride of the Lord Privy Seal, which is, after all, a matter of small importance when compared with the honour of the Conservative party. If the Government do not accept this Amendment, they will be letting down their supporters very badly. Some people think this is not the first occasion on which they have done this. They may be let down a certain number of times, but if they are let down constantly it is bound to strain their loyalty too far.

Mr. LAMBERT: There is one observation which fell from my hon. and gallant colleague in the representation of Devonshire (Lieut.-Colonel Acland-Troyte) that I thoroughly endorse. I ask the Government to have a little courage. Their
action in this matter fills me with a good deal of despair. [HON. MBMBEKS: "Hear, hear!"] I am not sure that I court those cheers from the other side. I say to the Government that infirmity of purpose is fatal to good government. We know that the Measure in question was the principal Measure of the late Socialist Government. It was, as my hon. and gallant Friend said, guillotined through the House of Commons. There was a good deal of bargaining with the party to which I belong, although I did not take part in it. [Interruption.] I am a Liberal now. I say I did not take any part in that bargaining, because I opposed the Bill root and branch. Well, the Bill was passed, and within six weeks after it was passed the Government floundered in the waters of political bankruptcy. There is no question about that. There was an election, short, sharp and decisive, and hon. Gentlemen know the result. [Interruption.] This is a very serious matter. That decisive condemnation was led by the Prime Minister, the Lord Privy Seal and the Dominions Secretary. [An HON. MEMBER: "And Lord Beaverbrook!"] I did not know that Lord Beaverbrook belonged to the Labour party. Do not let us get things mixed up too much.
I have a, good many years' experience in this House, and I say that this is quite an unprecedented action. I have never known such a thing before as postponing an Act. One understands a good Act or a bad Act. If it is a good Act it can go on, but if it is a bad Act it ought to be repealed. Now the Government, apparently, are putting this Bill in the position of a dormouse. It is to hibernate, and to wake up some time— when, I would like to know. If this is the result of a compromise in the Cabinet, again I would say that a Government cannot exist on compromise. A Government must have a mind of its own. It must have courage in purpose and resolution in action. These land questions have been treated with a good deal of hesitancy and wobbling. We have been told, first, on agricultural questions, that we must wait for Ottawa. But there is no question of waiting for Ottawa here. This is a matter which the House of Commons can deal with at once.
If the Dominions at Ottawa would like to share some of our taxes we should be delighted for them to do so. I appeal to the Government as a friend. I want to support them. I tell hon. Members opposite quite frankly that I do not see anything between this country and anarchy except this Government. Therefore, I do not want the Government to fall between the two stools of suspension or repeal. I have looked up the Debates on this subject. There was a Second Reading Debate on the 19th May, 1931, when an Amendment was moved by the present Chancellor of the Exchequer on behalf of the Conservative party stating in regard to the Bill that it
…. introduces a new tax on one particular form of capital, thereby destroying confidence in all transactions in land….
Either that statement is right or it is wrong. I and others voted with the Conservative party in support of that Amendment, which declared that Part III of the Finance Act, 1931, "destroys confidence in all transactions in land." If it destroyed confidence in transactions in land in May, 1931, why does it not destroy confidence in transactions in land in May, 1932? [Interruption.] I am not joking about this matter. It is very serious. The Amendment further stated that the Bill would
increase the already overwhelming amount of unemployment in the country."— [OFFICIAL REPORT, 19th May, 1931; col. 1801, Vol. 252.]
If it would increase the already overwhelming amount of unemployment in the country in May, 1931, it will do exactly the same in May, 1932. Why, therefore, leave it on the Statute Book? We know full well that if there was a free vote of the House there would be a vote of at least six to one against this Act. It is inconceivable after the verdict of the country that the Government should continue this Act on the Statute Book. I will not go into the pledges of the Conservative leaders, but they did make pledges and we as Liberals acted with them in the last House of Commons in supporting their Amendments against thi3 Act. Therefore, for them to allow it to continue on the Statute Book is not playing the game. The Second Reading took place on the 19th May and the Third Reading on 3rd July, 1931. The present
Chancellor of the Exchequer having had six weeks in which to digest the Bill declared on the Third Reading that it was of an injurious and destructive character. Another description of the Bill came from the Foreign Secretary, one of the greatest lawyers in the country. He said that it was clear that the Bill was nothing more than a step to State ownership; a step by way of confiscation and not by way of compensation. Do the Government propose to allow an Act to remain on the Statute Book which is a step to State ownership by way of confiscation? If so, they are trifling with the House of Commons and the country.

Mr. MANDER: What did Lord Snow-den say?

Mr. LAMBERT: I am not concerned with Lord Snowden's views. I have quoted the views of the Foreign Secretary. My hon. Friend seems to know the mind of the Government better than I do, but I have not noticed that he has been taken much into their confidence. I would ask the supporters of the Government to tell the Government that this sort of thing cannot go on. There has been a good deal of hesitation and wobbling in regard to land questions and to agriculture. The Government made it as plain and explicit as possible to the country that if they were returned to power they would repeal this Act. It is to be suspended. For how long? What is to happen? Is that procedure not unprecedented? It has never been done in my political lifetime. Can the Government give a precedent for hanging up an Act and saying that it shall not come into operation until Parliament otherwise determines? This Act is the law of the land, but it is to be suspended between heaven and earth until Parliament otherwise determines. I do not understand it. [An HON. MEMBER: "What about the Home Rule Act?"] My hon. Friend must know that that was suspended during the War. There is no war now. [Interruption.] Everybody seems to be trying to make my speech for me. It is suggested that because the Home Rule Act was hung up in the early part of the War that can be compared with the suspension of this particular Act. Such a suggestion is playing with the House of Commons. I ask the
Government to repeal the Act. Let them do what they were pledged to do at the election.

Sir PERCY HARRIS: Who gave the pledge?

The DEPUTY-CHAIRMAN: I would remind the Committee that we have come to a voluntary arrangement to try to finish the Bill to-night. These interruptions do not assist in carrying out that arrangement.

Mr. LAMBERT: I will try to keep my part of the bargain. I will conclude by asking the Government, in their own interests, to repeal the Act. If they do not repeal it there will be uncertainty throughout the country. Every owner of land for development will be in a state of difficulty and embarrassment. Therefore, I ask the Government respectfully, friendly and in all sincerity not to proceed with this Clause, but to repeal the Act straight away.

Mr. GORDON MACDONALD: The view of this side of the Committee is well known. In listening to the right hon. Member for South Molton (Mr. Lambert) I have felt that the Liberals have something to be thankful for that he still claims to be a Liberal, but the Liberals behind him did not seem to be very proud of his claim. I suppose the Lord President of the Council was pleased at the demand that he should grant a free vote. I expect he will grant a free vote. Certain hon. Members claim free votes on some questions but they object to free votes on other questions. They want a free vote if it suits their purpose but not a free vote if it does not suit their purpose. I remember a Debate of a similar kind about 12 years ago. I was privileged to listen to that Debate from the Gallery, and I have been struck by the resemblance to the present position. On that occasion a Coalition Government was repealing a Liberal Act of Parliament. On the present occasion we have a Coalition Government repealing a Labour Act of Parliament. Some remarks were made which suited the occasion very well. One hon. Member named Mr. C. White, in opposing the repeal of the Act, used these words:
I should have moved to report Progress so that the Prime Minister could have been here himself to have explained his attitude in this matter. Surely it is not respectful
to bury the child without the presence of the father. At any rate, an explanation is due to those men and women who, at his bidding, fired by his religious fervour, by his perorations, carefully prepared, but called impromptu perorations—I remember many of them—went out, many of whom could not sing very much, singing 'The land song' with our unmusical voices.
There might be a variation of that song. Instead of the words
God gave the land to the people
it might read
God gave the Lamberts to the Liberals.
The hon. Member went on to say:
The Prime Minister then delighted in being called a robber of hen roosts, but he now stands convicted by his silence of deserving some such a name as that. At any rate, if he does not deserve that he does deserve to be called a man who deceived some of us in the years that are past."— [OFFICIAL REPORT, 14th July, 1920; col. 2515, Vol. 131.]
The father of the Act of Parliament which it is now proposed to suspend was not the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George). The father was the present Lord Privy Seal. Hon. Members who have already spoken seem anxious to know where the Lord Privy Seal stands on this question. He is in another place and cannot be here, but if the Lord President of the Council could have arranged this Debate so that the Prime Minister's health would have enabled him to be present, we should have been pleased. He might have told us how he stands on this question. No two men did more to get our party pledged to support the Act which it is now suggested should be repealed.
Our case is very simple. We realise that this is a Conservative Government. The Dominions Secretary, in an article in a publication known as "The News Letter" is at great pains to show that this is not a Conservative Government, but he failed to convince me. Not only is this Finance Bill a piece of legislation which indicates a Conservative Government but the Amendment that has been moved indicates that there are some Conservatives who want a stronger Conservative police than even the Government want. We think that the Act ought not to be repealed but that a date ought to be inserted in it. We have an Amendment on the Order Paper which provides that we should leave out the words:
As Parliament may hereafter determine.
and to insert the words:
Ending the thirty-first day of March, nineteen hundred and thirty-five.
4.30 p.m.
We realise that we cannot expect this Act to operate immediately, but we do think that it is in the interests in the House to see that this Section of the Act does operate at the latest by the end of December, 1935. We realise the advantage of the Act as it stands. There is the advantage of revenue, but that has never been our great claim. Not because it was a revenue producing instrument were we so strongly behind the Act. We supported it because we believed that it would cheapen land and bring land into greater use. For that reason we feel that, in the interests of the country, the Act ought to operate from the date mentioned in our Amendment. The Lord Privy Seal taught us to accept this proposal. Let me quote some words which he used on 27th of April last year when dealing with this matter.
The scandal of the private appropriation of land values created by the enterprise and industry of the people and by the expenditure of public money has been tolerated far too long. In asserting the right of the community to a share in what has been created by the community, we are taking a step which will be approved not only by the Labour and the Liberal parties, which have long advocated this reform, but also by a large number of Conservatives, whose sense of justice is outraged by glaring examples of the exploitation of the public by private land monopolists. The present system stands in the way of social and economic progress, inflicts crushing burdens on industry and hinders municipal development. When we have carried this Measure, as I am sure we shall, we shall look back upon the Budget of this year as a landmark on the road of social and economic progress, and as one further stage towards the emancipation of the people from the tyranny and the injustice of private land monopoly."— [OFFICIAL REPORT, 27th April, 1931; col. 1411, Vol. 251.]
This Bill, of course, will stand as it is; but I am quite certain that the proposal which is now to be repealed will be re-enacted and will come into operation. Nothing on earth can stop it. The Conservative majority in the Committee can repeal a Labour Act of Parliament, but it cannot prevent the people of this country claiming their fair share in the development of the land of the country.

The LORD PRESIDENT of the COUNCIL (Mr. Baldwin): The beautiful words which the hon. Member quoted
from the Chancellor of the Exchequer in the Labour Government only confirms me once more in my conviction that there is nothing so dangerous as to prophesy, and that is a truth upon which he might ponder in regard to his own concluding words. I am not rising to attempt in any way to curtail the discussion or to argue the more technical details of the Amendments; I want to explain to the Committee as briefly and as clearly as I can why the Government are not prepared to accept Amendments which will repeal the Statute or which will insert a date, such as hon. Members opposite want. Had this been a Tory Government we should have repealed the Statute. Had I been a private Member I should very likely have put my name to the Amendment to which hon. Members from Devonshire have put their names, but I occupy a more responsible position, and I have to remember that, this is a National Government. The right hon. Member for South Molton (Mr. Lambert) asked whether there was any precedent for what we are doing. I do not know; and I do not care. We have to make our precedents, if they do not exist, as we go along. He said that this was a matter of compromise, while the hon. and gallant Member for Tiverton (Lieut.-Colonel Acland-Troyte) said that it was the result of an agreement to differ. In a way that is true, but I would call the attention of the Committee to the difference.
I am not going to give away any Cabinet secrets, but I think I can say enough to enable the Committee to see how a decision of this kind has been arrived at without breaking any confidences, and only using as examples conversations in which I have taken part myself. Let me remind the Committee that the subject of land taxes and land valuation is one of the deepest controversy between parties. I remember very vividly how we were kept up night after night, and all night, on what was then called the Lloyd George Budget. I was a Member of the Coalition Government when the Lloyd George taxes were finally removed from the Statute Book. That was not done in the first Budget after the Coalition was formed. All parents of contentious legislation watch the failing
health of their offspring with apprehension, and it was not until the second year of the Coalition that the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George), with a vast shrug of his shoulders, watched the interment of the child of 12 or 13 years before.
With regard to this Act, we all remember what took place in the House of Commons. In the National Government there are five Members who were Members of the Labour Cabinet when this Act became law. The matter has been considered and discussed among us. Members of the National Government, fully conscious of the importance of the cause for which they were returned by the country to serve, are anxious, so far as practicable, without sacrifice of principles, to hold together; to give and take. What is the present effect of this Statute? It is a Statute in coma. For this Parliament there can be no prospect at all of there being a land tax or land valuation, so that apprehension ought to be removed. It is true that the Statute is on the Statute Book, but action is delayed until Parliament so wills. That is the position to-day.
I put this question to private Members, and particularly to those who fought in the Midlands and in the North —not in Devonshire, because it does not matter what the right hon. Gentleman for South Molton stands for in Devonshire he will get in. Would any one of you who had been a member of a National Government, who had gone through the fight we went through last autumn, who had taken part in the discussions on finance on the first construction of the National Government with men who fought during that Election like Lord Snowden, when you had been met, by those who had been opposed to you, by their consenting to eviscerate this Act, and when they expressed to you their reluctance to see the Act finally taken off the Statute Book, do you think that I, going about the country as I did and knowing the force of Lord Snowden's speeches and broadcasts in helping to win seats which we should never have won, was going to say to them, "Oh, no, now we have got a big Tory majority, much bigger than I expected, out you go." Not much. That is why we stand for the Clause as it
is in the Bill. We can accept neither a repeal of the Act nor the insertion of the Amendments.

Sir STAFFORD CRIPPS: We have had a very interesting statement from the Lord President of the Council as to the number of pieces of silver which have been handed to Lord Snowden. Apparently this is the price which is being paid by the National party for his marvellous speeches over the wireless immediately preceding the last election. It may be satisfactory to the National party, and I am sure that the right hon. Member for South Molton (Mr. Lambert) will now feel perfectly happy that the Bill shall go forward in the form in which it is now. As far as we are concerned it is not a satisfactory solution. This is, of course, quite obviously a compromise. It is a compromise which is intended to produce a state of coma referred to by the Lord President of the Council, and a state of coma generally precedes death. No doubt that is the intention of the right hon. Gentleman's remarks. Perhaps it is a decent way of interment in order that the father may be given that respite of sorrow which he deserves for the champion speeches he put up at the time of the election. It seems to us that this method of dealing with it is just dishonest. Either it is the intention of the Government not to go forward with the Land Tax—and I am bound to say that I sympathise with the right hon. Gentleman for South Molton that it would be just as well to repeal the Act—or else it is their intention when the times become quieter, if ever they do under a National Government, that these Land Taxes shall go forward. The Lord President of the Council has not told us which it is to be. He has not definitely stated that the National Government have made up their mind on either view. Apparently they are postponing the evil day for another year, and for that reason we shall certainly vote against the Clause although we do not propose to call a Division on all the Amendments.

Colonel Sir GEORGE COURTHOPE: I am very sorry to find myself in disagreement with the Leader of my party, the Lord President of the Council. He has ignored the fact that the land value tax,
so long as it remains on the Statute Book, however long the postponement of its operation may be, is a contingent liability in the balance sheet of every single unit of land in the country. What, we ask the Government to do is not to abandon one penny piece of revenue but to remove a contingent liability from the assets of the country at a time when confidence is more needed than ever. How severe that contingent liability is and how important it is to remove it, I will try to explain. Several speakers to-day, and also last year when the Finance Bill of 1931 was before the House, have spoken of this matter as if it were merely a question of raising or depressing land values for the purposes of sale. It is nothing of the kind. What this contingent liability does is to destroy confidence and depress values for the purposes of credit, and in these days no owner of land, be he large or small, can maintain his property and utilize it to the best advantage without credit. So long as there is this contingent liability hanging on to every unit of land, there is a distinct added difficulty in either obtaining credit or retaining it when once you have got it. It is a deterrent to obtaining loans on mortgage, as every one who handles real property of any kind must have found.
Others have spoken of this land values tax as if it were serious only in the case of quite a small proportion of the land of the country. But that is not so, because it is proposed that this tax should apply to every unit of land, which has to be valued according to the Act of last year as if it was the only unit of land available for any particular purpose of development. The example that was taken in the Debate last year given by the hon. and learned Gentleman who was then Solicitor-General was, I think, an urban one. He took the case of the site of the Savoy, and said that that would be valued on the assumption that it was entirely cleared, and as if every other building in the Strand remained in position. That is undoubtedly the correct interpretation of the Act of last year. It would consequently be a heavy burden on every unit of land, and although its operation is postponed it remains a contingent liability. Every one in business knows how the existence of contingent liabilities interferes with the raising of
new capital or the obtaining of credit of any kind. It is a terrible drawback to a public company which wants to raise capital.
The Treasury know perfectly well that their contingent liabilities under the Trade Facilities Act and guarantees of that kind have a definite bearing upon their capacity to borrow and the rate at which they can borrow in the City. So it is with every owner of land, whether it is the site of a cottage or farm or a site in the City of London. So long as this contingent liability remains there is a definite hindrance to obtaining the full credit to which the value of that unit of land is entitled. So I do hope that our Front Bench will realise that they are making a very serious decision in pro posing to retain this tax upon the Statute Book. Do not let them think for one moment that the tax is doing no harm so long as it is not put into operation. It is doing a very great and serious harm, and if the Government persist in this course let them realise how much harm they are doing—harm for which they will get the full blame in the country.

Sir P. HARRIS: I want to thank the Lord President of the Council for his very fair and frank statement of the position. It is what we expected from him, and is in keeping with the way he has acted all through the last few months. He has tried at any rate, under great difficulties, to keep the national character of the Government. We are not forgetting the political past of the Prime Minister. The Prime Minister was the head of a Government that was responsible for this particular Act of Parliament. He endeavoured to make clear to the country that he had not altered any of his political opinions and that he reserved the right to retain his views. As recently as November last, after the formation of the second National Government, he said at the Guildhall:
We are a National Government. The Cabinet and Administration consists of Members of all parties, none of whom has shed his party allegiance.
We Liberals—I speak for a good many in the country—attach great importance to retaining the valuation Sections of the Finance Act of last year on the Statute Book. We still believe that they are of
great value, and we want to see them in operation at the first opportunity. We realise that the majority in this House is against us, but when the financial position has changed, when so-called national emergencies have disappeared and inter national affairs have become more normal, we claim full right to use all our energies not only to get the valuation into operation but to levy the taxes for which the Act provided.

Mr. MICHAEL BEAUMONT: All of us listened with respect and admiration, as we always do, to the statement of the Lord President of the Council, but I cannot suggest that my right hon. Friend altered in any way my decision to sup port the Amendment so ably moved by my hon. and gallant Friend. The Lord President reminded us that this was a National Government, and in effect he said that this was a part of the price paid to the Lord Privy Seal for his ser vices before the last General Election. We all appreciate the advantages and the disadvantages of a National Government, but I have never heard that among either was the question of minority rule. The retention of this tax on the Statute Book is unquestionably minority rule. If there is one thing more certain than another it is that the vast majority of both Houses want these taxes repealed. Is the retention of a tax on the Statute Book to be treated as a bargaining power between different Members of the Cabinet? I submit that it is not in the highest interests of the country or in accordance with the high traditions which the National Government have so ably kept up, to use taxation or the suspension of taxation as a bargaining power for the adherence or non-adherence of one Member or another.
We believe these taxes to be definitely bad and that they should be repealed. If they were bad in May, 1931, they are bad in May, 1932, and the only thing that has changed in the last 12 months is that the power of repealing them is in this new House of Commons. I suggest that the Government are simply shirking a vital issue which has to be faced. The issue as to whether these taxes are to be pushed forward or repealed has to be faced at some time, and it had better be faced now. Running away from vital issues was the thing that brought down the last Government. If we once start
that course it is a thing which it is fatally easy to follow up. I beg the Government to face the issue, to take their courage in one hand, in both hands, or rather to take their courage in one hand and their principles in the other, and to support the Amendment of my hon. and gallant Friend.

Mr. WALLHEAD: I should have been content to have remained in my place except for the fact that, although an arrangement was come to an hour ago, supporters of the Government are breaking the agreement. [Interruption.] It was a friendly arrangement, but quite a dozen supporters of the Government are anxious to talk and they are keeping the Debate going. I am not going to find fault with the decision of the Lord President of the Council. I do not think he could have done differently in common decency. He has had the decency to admit that he and his party would not have been here in their present strength except for the action of the father of the Act under discussion. It was Lord Snowden's action last year that gave to the Conservative party the preponderating power it has in this House. It is quite clear, of course, that the Lord Privy Seal is quite content with the state of coma to which the Lord President has referred. I can see clearly, and I can prophesy, that the coma will gradually pass into absolute extinction; death will take place before this Parliament rises, no matter what arrangements may be come to. The moment that the late members of the Labour party have served fully the purpose of the Conservatives they will be told that they can get out or take the consequences, and then this Bill will go. I would have liked to have seen some. Socialist supporters of the Prime Minister and of Lord Snowden raising their protests against this action on the part of their colleagues in the present Government. I should have thought that this was their opportunity of putting the Socialist point of view.

Mr. HOLFORD KNIGHT: The hon. Member complained just now that the arrangement made to curtail discussion had been broken, and he is now complaining that other speeches are not being made.

Mr. WALLHEAD: I understood that certain supporters of the present Government were in this House for the purpose
of maintaning the Socialist point of view, but in all the Debates that have taken place since the National Government was instituted, the Socialist supporters of the Government have been conspicuous by their silence. I have never heard their voices raised from that point of view. I should have thought that they would have been in friendly contention with their Conservative colleagues in maintaining the authority of the Lord Privy Seal. [Interruption.] If hon. Members who interrupt want to see broken the arrangement that has been come to, we can do it. I want to see this Act retained; I want to see it strengthened and enlarged. I do not want the fight over land values again. Therefore I welcome what has been said. At the same time I want to see Socialist supporters of the Government maintaining Socialist principles. They are where they are as hostages of fortune, and they ought to play their part.

5.0 p.m.

Mr. KNIGHT: I did not propose to intervene because I understood that some arrangement had been made to curtail discussion. It is only right, however, that in a few sentences I should express a point of view which I share without any reservation with the Lord Privy Seal. I share the view which has long been represented by the Lord Privy Seal but I acknowledge the description of the position given to-day by the Lord President of the Council. The friendly controversy which has arisen is due to the fact that hon. Members opposite have never properly recognised the circumstances which brought this Government into existence. It was because they failed to recognise the circumstances that the country with some indignation rejected them and placed this Government in office; and they still affect not to understand the motives which lead this Government to continue its legislation. As I say, I agree with the general description of the position given by the Lord President of the Council and, if I may be allowed to make a personal reference, I would say that I have been engaged in this controversy since it started in 1909 when the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George) incorporated these land taxation proposals in his Budget of that year. I have never desisted from the view which I then held. I am satis-
fied that the time will come when, in any assessment of the economic resources of the country, the value of the land will have to be taken into account. I have never changed my view upon that point but in present circumstances I realise the practical difficulties to which the hon. Baronet the Member for Rye (Sir G. Courthope) has alluded and the difficulties of owners of agricultural land at the present time. I also realise the circum stances of this Government and the fact that we have to concentrate on immediate and practical purposes. But in response to the friendly suggestion of my hon. Friend the Member for Merthyr (Mr. Wallhead) it is right to say that there are Members in this House, sup porters of the Prime Minister, who have not abated their attachment to the principles and policies of the previous Government but who are prepared, in the interests of the nation, at this moment to support a general national Administration.

Mr. RAIKES: The hon. Baronet the Member for Eye (Sir G. Courthope) showed very clearly to many of us that whatever else may be said on this question the very fact that this provision remains at all must do a certain amount of harm to the welfare of the country. Which course, then, are we going to choose? Are we going to agree that a certain amount of harm should be done to the welfare of the country, or are we going to refuse to bow to the personal predelictions of certain Ministers? That is the crux of the matter. The hon. Member for South-West Bethnal Green (Sir P. Harris) stated the Opposition case very wisely. He of course wants to keep this provision in existence for use at a later date. He says that he is maintaining his identity as a Liberal and, naturally, he desires the opportunity later on of making use of whatever is left of the land values proposals for Liberal purposes.
Are the Conservatives to be the only people who are not to be allowed to maintain their identity? Are we to bow the knee to every compromise? I suggest in all seriousness to the Lord President of the Council that the greatest danger to the national welfare and to the National Government will arise if there is for one moment a breath of suspicion that
principle is in any way being com promised for the sake of expediency. We on the Conservative side for years fought the principle of land value taxation, all along the line, as a bad principle. Sup pose that, as has been suggested, it passes into a state of coma now, until the next election; suppose that at the next election you have land tax proposals brought up by hon. Members who are now sitting in Opposition and suppose that they get in, which is quite possible, how are we, then, going to fight the principle in the country if we have allowed that principle to slip for two or three years under this Administration? It must be either right or wrong and, for my part I stand by the Amendment.

Mr. COCKS: I would like to defend the Lord President of the Council from the furious onslaught of the hon. Member for South-East Essex (Mr. Raikes). I think that from his own point of view the right hon. Gentleman adopted a very reasonable attitude. He is suspending the operation of this taxation. He is just waiting until the author of the scheme has worn the robes of nobility for a little while longer, until he has acquired, as he probably will, in a year's time, the usual sentiments of a landed proprietor. It would be cruel to the Noble Lord who is the author of this taxation scheme to kill it at the present moment, because this proposal represents the sum total of the achievement of the Noble Lord's political career. For 36 years he has toiled and worked for these land taxes and last year he had the satisfaction of placing them on the Statute Book. It is true that they are very small. It is true that they have never really enjoyed the breath of life, but they are the one creative thing which he has ever done and if they are repealed now, what will be left to him to show for his whole existence? If they are repealed now there will be nothing left to console him for a hard-working if somewhat acidulous existence but the Opera Subsidy. To repeal them now would be to rob the Noble Lord of that gratitude which ought to be shown to him for the great help he gave to hon. Members opposite during the last election. I think hon. Members ought to be patient. The Noble Lord has not at the present moment any chaplet of laurels pressed down upon his brow. They should leave him this one little
withered leaf as the sole momento of a wasted and futile life.

Mr. MACQUISTEN: These taxes were brought in as has been said in 1909 but the movement in favour of them started away back about 1903 with a somewhat doubtful Glasgow bailie. He lived off the agitation for many years and ultimately managed to stuff this proposal into the programme of the Liberal party who never understood the matter properly. These taxes have been proved to be exceedingly damaging to land and to landowners. They make the transfer of land dearer and more difficult and not cheaper and easier. Particulars have constantly to be supplied, solicitors have to be employed, and there are any number of "Nosey Parkers" going about in Government Departments looking after these things and it all costs money. The right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George) although he was a solicitor never under stood anything about landed estates. His only acquaintance with them was gathered from going about the country districts and seeing the notices about trespassing and about land for sale. When he brought these proposals into his 1909 Budget one of the calamities was that the scheme was not allowed to stand just as it was originally because it would have ruined the Liberal party. As it was the taxes were found to be utterly unworkable in practice. Most of the young men in this House do not know anything about the history of this matter but I was concerned in this business even before the right hon. Gentleman the Member for Carnarvon Boroughs and I know the damage which was done to the building trade, for instance, as a result of this taxation. It is due to those taxes that there is a housing problem to-day because as a result of them nobody could build cottages or houses of any kind for working people.
Another result was that a great many surveyors and architects were put out of their jobs. They were immediately rushed into the Government Valuation Department—a perfect army of them, all living off the taxpayers. When the taxes were found to be unworkable the scheme was scrapped by the Coalition Government. Even their author understood then that they were unworkable though it took a long time to get it into his
head. Then these people who had been brought into the Government Valuation Department were kept working away for a year or two winding up but at the end of that time they began to find them selves idle, just as the Employment Ex changes were idle until we invented the unemployment dole to make sure that they would not be unemployed. Then these fellows sat back and said: "All this land tax agitation is forgotten. The litigation about Form IV has disappeared. The masses of the people have been forming fours in the Army and have for gotten all about it, so we will start the business once again, to avoid being scrapped. "Accordingly they stuck the Labour Government in the same way as they had previously stuck the Liberal Government. The taxes which were un workable under the Budget of 1909 are just as unworkable under the Budget of last year, which was said to be such a monument—and so it was, a monument of folly and disingenuousness because it did not disclose the state of the country at all.

Mr. BUCHANAN: The author of it is a Member of your Government.

Mr. MACQUISTEN: Yes, he is in the Government and I have a great regard for him and I quite admit that his speeches were very valuable but is the landed interest and all the people who are concerned with the land to be sacrificed, simply to avoid hurting the feelings of any Member of the Government? It is all very well for the Lord President of the Council to say that he looks upon Lord Snowden as his friend, but the interest of the country is the only interest to which the right hon. Gentleman ought to have regard. After all, what did Lord Snowden do at the last Election except to tell his followers that all the nostrums which he had been advocating for years would not work and that ho had led the country "down the drain." To some extent he has led our party "down the drain" because we have been going in for a great many Socialist nostrums which are thoroughly unsound. I do not know whether it is the result of sitting opposite to each other and looking at each other but the Conservative party have been taking a certain tinge from the Socialist party and I think that our own party has been very much to blame in regard to certain measures.
These taxes are of no use. If you want to get at unearned income on land then you ought to empower the Government to buy the land and take the chance of the income. But do not take the money off the poor shivering wretches who are burdened with the ownership of land. It is not the man who owns the land nowadays but the land which owns the man. [Interruption.] Yes, we get it all round about us in the end, and some of us will enrich it more than others. In agricultural language that will depend on our manorial value. To continue these taxes would only be in the interests of those people in the land valuation department who have stuck successive Governments with this proposal in order to keep their jobs. Why not pension them off and enable them to cultivate a bit of land? They will then know something about it. The one problem that we have to solve in this civilisation and in all Anglo-Saxon civilisations is that we are being eaten up by officials. They are clinging on the backs of the working men, and more and more people are continually demanding pensions, and we are having more and more inspectors of this and of that, so that those who produce the wealth of the country have not a chance to live; and unless the Government take in hand enormous cuts and tell all these over developed people—

The DEPUTY-CHAIRMAN: The hon. and learned Member is now getting very far away from the Clause.

Mr. MACQUISTEN: I agree with you, Captain Bourne. I was getting over developed. But I say that here is an opportunity to do something to get quit of a Government Department, and if we can get quit of a Government Department, it is a great step towards prosperity for the country. After all, the acceptance of this Amendment would not hinder our hon. Friends opposite, if the country should be disgusted with the present Government for not being a really National Government and for not acting and doing what the country believed they would do, and should put a Socialist Government back into power. It would be a very simple matter to bring in these proposals again, and they would have valuers and lawyers and other officials all jumping to 'attention at once. But let
us take these taxes off the Statute Book now as quickly as possible. There is no use having a sword of Damocles hanging over your head all the time. Such a tax is damaging, and it is wrong to keep it on the Statute Book, and very unhealthy to have it there. Therefore, I wish the Government would take their courage in their hands and remember that a National Government is a Government that does the best for the population, not for the susceptibilities of particular members of any section of the population.

Mr. McGOVERN: I have listened to the appeals made here to-day on behalf of the poor landlord of this country, and I feel that a word should be put in for those who are suffering from the effects of landlordism. The proposal put for ward by certain Members of the Conservative and Liberal parties is that these Land Taxes should be repealed instead of being merely suspended. I can under stand their anxiety lest at any time the Land Taxes should come into full working order, as they were liable to have done in the event of the continuation of the late Administration. At the same time, I think they can take consolation from the words of the Lord President of the Council, when he assured them that during 'at least the four or five years of this Government there is no danger of these taxes operating. He was quite honest when he stated that if he were a private Member, he would probably have associated himself with the demand for the repeal of the taxes. That being the ease, I hope that those who have put down this Amendment will do as he claimed that he would have done, and go into the Lobby in favour of it.
I am rather inclined to think that we should have no need of a time-table in this House in connection with any of these Clauses if we had more common honesty and decency among the people who are putting down Amendments. They should either put down Amendments in order to get concessions from the Government, or, if no concessions are granted, they should carry their Amendments into the Division Lobby to test the feeling of Members on all sides of the House. But we get them on every other Clause leading their army up to the top of the hill, making all sorts of threats to the Government as to what they intend to do, and then retreating, like a
cowardly, bedraggled army, when they are expected to take the plunge and oppose the Government of the day. I had not a tremendous amount of faith in the effect of these taxes passed by the last Administration, but I do say that it brings the Government of this country to a farce when you spend, as we spent, almost the whole of the spring and summer months, night after night, in an endless amount of talk in favour of or in opposition to Land Taxes, and then, with a simple turning of the tide and manipulation of the electoral machinery, you attempt to turn your machine against the decisions of a previous Government.
I say quite frankly that if this question of the land of the country was presented to the electors—either the question of a Land Tax or the question of the ownership of land—the electors would enthusiastically and by a very large majority endorse the previous proposals and would go a great deal farther. The only fault that I find with this tax is that it does not go far enough, and I am hoping that the lessons of this Land Tax, with a danger of the fall of the Government because of a matter of one-sixteenth of a penny, may result, if a Socialist Government is again in office —if the system does not completely collapse earlier, and I anticipate that the whole system will collapse before we can get another Government in this country— in that Government tackling the question in a very different manner. I am engaged now in reading up and studying how the Russian State acquired the land of Russia, and I hope that if a future Ad ministration of a Socialist nature should be in operation in this country, I shall be able to contribute to the discussion and suggest radical methods of obtaining the land of this country by a more modern machine than by the method of one-eighth of a penny at a time.
A plea has been put up that the land lords of this country, owing to the in decision of the Government, are not able to get that confidence in their business affairs that one might expect, but they are surely able to make up their minds on the promise made by the Lord President of the Council that there is no danger of the tax operating for five years at least, and I believe that before the end of that time the Members of the
Government will have made up their minds to the extent of annulling and completely wiping out this tax. The Lord President of the Council has been honest in his statement that the only reason for keeping the tax on the Statute Book was to give a certain ease to the conscience of Lord Snowden and the present Prime Minister of this country. He says that he could not honourably wipe out these taxes now, because it would be an affront to those who are in the National Government, and I was glad to hear the hon. Member opposite putting his point of view from the National Socialist party.
I may be wrong, but I do not think I heard his voice, or the so-called National Socialist party raising their voice, in any way in protest when these taxes were going to be suspended, and if they believe in the operation of the tax, I suggest that even in a state of national emergency there was the greater need for the country adopting such a tax and getting it into full working order in order to collect the ultimate revenue obtainable from it. Therefore, I am glad to see that the hon. Member opposite gave us his point of view to-day, although he was largely dragged to his feet by a Member of our group. The honest opinion of the overwhelming number of the Members of the Tory party is that this tax is a bad tax, which should be wiped out. If that is their point of view, why do they not have the courage to go into the Lobby to-night for this Amendment? They are all very confident and courageous when there is no fight on. As a matter of fact, we saw all that game in the last Administration. I had not much knowledge of it, but we always found out that there were plenty of rebels until the numbers in the Division Lobby were called out, and then it was found that there were very few, and it all came to excuses for their not being there.
Whether I agree with a man's point of view or not, I admire him if he has the courage to carry his convictions into the Division Lobby, no matter what his Front Bench may say. I believe that if that Front Bench put up a point of view that is not the point of view of the individual, or the party, or the interests that an hon. Member represents in the
country, he ought to manifest that point of view by carrying his voice into the Lobby, because otherwise it reduces discussion in this House to a farce. What is the use of endless Amendments on the Order Paper and a person getting up, for the sake of getting his voice across to the country and showing to those who have asked him to demand a repeal that he is prepared to voice that demand in the House, and then saying, "I did not carry my protest into the Division Lobby. The promise of the right hon. Gentleman has been so satisfactory; I thank him for nothing, and I withdraw the Amendment in my name"?
That is an absurdity, and I cannot understand it. I would rather leave this House entirely than adopt a policy of that description. It is hypocrisy and make-belief of the worst description. Just as I disagree with the Labour party carrying out this Tory policy, I would object if I were a Tory to see my party carrying out a Liberal policy, and there fore I hope the hon. Members who have put their names to this Amendment will have a little courage and will go into the Division Lobby, thus showing us that public decency and duty have not passed out of this arena. There is nothing that brings this House of Commons into the contempt of the people outside more than this sham and make-belief. I invite hon. Members to go into the Lobby on this question, and I will give them an opportunity, by raising my voice when the Question is put, to carry it to a Division.

5.30 p.m.

Mr. CHARLES WILLIAMS: Every hon. Member who listened to the Lord President of the Council will agree that the late Chancellor of the Exchequer has a very loyal colleague indeed. I do not think I have ever heard, in the course of many years in this House, a greater case of loyalty to a colleague—who has not, I believe, voted for the Government so very strongly himself all the time—than was given to us this afternoon. I wonder which of the two private Members below the Gangway opposite who have spoken this afternoon has been the loyalest and the firmest and the best supporter of the National Government—the right hon. Member for South Molton (Mr. Lambert) or the hon. Member for South-West Bethnal Green (Sir P. Harris)? These are not members of my party, and we Tories owe a debt to those Liberals
who are loyal to us in the constituency in the same way as our loyalty entitles us to their loyalty. The ordinary private Member might occasionally have ex tended to him the loyalty which he shows in such profusion to Members of the Cabinet. It has been agreed that because of very bitter feeling in the Cabinet the Members of the Government should be free to vote as they like. Why should you not extend that freedom to the private Members? Some of us have been tried very hard both here and in the country by the attacks which are going on behind our backs from Members who are supposed to be supporters of this Government. That sort of attack does not entitle those who carry it on to loyalty on the Floor of the House of Commons. I happen to be in a fairly independent position, and I shall vote to-day as I have always voted, exactly as I choose.
I would like to remind the Committee what this battle is being fought about. It is all over some Sections of an Act which was passed last year and which the Lord President of the Council said was in a state of coma. It is more than that. This Clause is really nothing but a tombstone, and a rather expensive tombstone at that, erected to something that was passed in a previous Parliament and that ought to be abolished, something which is costing a great deal to many thousands of small people who are in anxiety about what is to happen in regard to the Land Tax. If the Government are really genuine in their desire to restore confidence, why cannot they make a big move and allow Members to vote with the same freedom that is allowed to Members of the Cabinet on certain questions such as tariffs. In view of the attacks which have been made against us by some Members of the Cabinet behind the scenes, it is wrong that those who sit on the Government Benches should not have absolute freedom to vote in a way that they think is right.

Sir WILLIAM DAVISON: I would not like to give a silent vote in favour of this Amendment. We all respect the speech which we have heard from our Leader, the Lord President of the Council; we would not have expected any other speech from him. He said that
had he not been a Member of the Administraiton, and had he been a back bencher, he might have taken another line. We respect and honour him for the line that he has taken, and we know that he will not object to us back benchers doing what we think is right and honourable. Many of us have felt-very sorely the action which Lord Snowden in another place and certain Members of the Government have taken in making light of and in holding up to obloquy things which we value very highly and which we think are essential in the intersts of the country. Nobody should complain if we back benchers also want to have the freedom of our con-

victions, and on this occasion to vote against the retention on the Statute Book of something which we believe is deleterious to the country and especially to the land, which is suffering so severely. I hope that Members who have put down this Amendment will carry it to the Division Lobby, and that others will have the same freedom of supporting it as Members of the Government reserve to themselves in dealing with other matters.

Question put, "That the words proposed to be left out, to the word 'such', in line 39, stand part of the Clause."

The Committee divided: Ayes, 298; Noes, 71.

Division No. 199.]
AYES.
[5.36 p.m.


Adams, D. M. (Poplar, South)
Cruddas, Lieut.-Colonel Bernard
Hamilton, Sir R.W.(Orkney & Zetl'nd)


Adams, Samuel Vyvyan T. (Leeds, W.)
Culverwell, Cyril Tom
Hammersley, Samuel S.


Agnew, Lieut.-Com. P. G.
Daggar, George
Hanley, Dennis A.


Albery, Irving James
Davidson, Rt. Hon. J. C. C.
Hannon, Patrick Joseph Henry


Allen, Lt.-Col. J. Sandeman (B'k'nhd.)
Davies, Maj. Geo. F.(Somerset, Yeovil)
Harbord, Arthur


Allen, Lt.-Col. Sir William (Armagh)
Davies, Rhys John (Westhoughton)
Harris, Sir Percy


Aske, Sir Robert William
Denman. Hon. R. D.
Hartland, George A.


Astbury, Lieut.-Com. Frederick Wolfe
Denville, Alfred
Harvey, George (Lambeth, Kenningt'n)


Attlee, Clement Richard
Dickie, John P.
Harvey, Major S. E. (Devon, Totnes)


Bailey, Eric Alfred George
Doran, Edward
Haslam, Sir John (Bolton)


Baldwin, Rt. Hon. Stanley
Dugdale, Captain Thomas Lionel
Headlam, Lieut.-Col. Cuthbert M.


Balniel, Lord
Duggan, Hubert John
Heilgers, Captain F. F. A.


Barton, Capt. Basil Kelsey
Duncan, Charles (Derby, Claycross)
Heneage, Lieut.-Colonel Arthur P.


Batey, Joseph
Dunglass, Lord
Hicks, Ernest George


Beaumont, Hon. R.E.B. (Portsm'th, C)
Eastwood, John Francis
Hills, Major Rt. Hon. John Waller


Betterton, Rt. Hon. Sir Henry B.
Edmondson, Major A. J.
Hirst, George Henry


Bevan, Aneurin (Ebbw Vale)
Edwards, Charles
Holdsworth, Herbert


Bevan, Stuart James (Holborn)
Elliot, Major Rt. Hon. Walter E.
Hope, Sydney (Chester, Stalybridge)


Bird, Ernest Roy (York., Skipton)
Ellis, Robert Geoffrey
Hore-Belisha, Leslie


Bird, Sir Robert B.(Wolverh'pton W.)
Elliston, Captain George Sampson
Hornby, Frank


Borodale, Viscount
Elmley, Viscount
Howard, Tom Forrest


Bossom, A. C.
Emrys-Evans, P. V.
Hudson, Capt. A. U. M. (Hackney, N.)


Boulton, W. W.
Entwistle, Cyril Fullard
Hudson, Robert Spear (Southport)


Bowyer, Capt. Sir George E. W.
Essenhigh, Reginald Clare
Hume, Sir George Hopwood


Boyce, H. Leslie
Falle, Sir Bertram G.
Hunter, Dr. Joseph (Dumfries)


Briant, Frank
Fielden, Edward Brocklehurst
Inskip, Rt. Hon. Sir Thomas W. H.


Briscoe, Capt. Richard George
Foot, Dingle (Dundee)
Jackson, Sir Henry (Wandsworth, C.)


Brockiebank, C. E. R.
Fuller, Captain A. G.
Jackson, J. C. (Heywood & Radcliffe)


Brown, C. W. E. (Notts., Mansfield)
Galbraith, James Francis Wallace
Jamieson, Douglas


Brown, Ernest (Leith)
Ganzoni, Sir John
Jenkins, Sir William


Buchan, John
Gibson, Charles Granville
Jennings, Roland


Burnett, John George
Gillett, Sir George Master man
Jesson, Major Thomas E.


Butt, Sir Alfred
Gilmour, Lt.-Col. Rt. Hon. Sir John
Johnston, J. W. (Clackmannan)


Campbell, Edward Taswell (Bromley)
Gluckstein, Louis Halle
Jones, J. J. (West Ham, Silvertown)


Campbell, Rear-Admiral G. (Burnley)
Goff, Sir Park
Jones, Lewis (Swansea, West)


Campbell-Johnston, Malcolm
Goldie, Noel B.
Jones, Morgan (Caerphilly)


Cape, Thomas
Goodman, Colonel Albert W.
Ker, J. Campbell


Caporn, Arthur Cecil
Gower, Sir Robert
Kerr, Hamilton W.


Cazalet, Thelma (Islington, E.)
Graham, Fergus (Cumberland, N.)
Knatchbull, Captain Hon. M. H. R.


Chapman, Col. R.(Houghton-le-Spring)
Grattan-Doyle, Sir Nicholas
Knebworth, Viscount


Chotzner, Alfred James
Graves, Marjorie
Knight, Holford


Clarry, Reginald George
Greaves-Lord, Sir Walter
Lansbury, Rt. Hon. George


Clayton, Dr. George C.
Greenwood, Rt. Hon. Arthur
Law, Sir Alfred


Cobb, Sir Cyril
Grenfell, David Rees (Glamorgan)
Lawson, John James


Cochrane, Commander Hon. A. D.
Griffith, F. Kingsley (Middlesbro', W.)
Leckie, J. A.


Colman, N. C. D.
Griffiths, T. (Monmouth, Pontypool)
Leech, Dr. J. W.


Colville, John
Grimston, R. V.
Lees-Jones, John


Cooke, Douglas
Grundy, Thomas W.
Leonard, William


Cooper, A. Duff
Guest, Capt. Rt. Hon. F. E.
Lewis, Oswald


Copeland, Ida
Guinness, Thomas L. E. B.
Liddall, Walter S.


Cove, William G.
Gunston, Captain D. W.
Lister, Rt. Hon. Sir Philip Cunliffe-


Cowan, D. M.
Guy, J. C. Morrison
Lloyd, Geoffrey


Creddock, Sir Reginald Henry
Hales, Harold K.
Locker-Lampson. Rt. Hn. G. (Wd. Gr'n)


Cripps, Sir Stafford
Hall, F. (York, W.R., Normanton)
Lovat-Fraser, James Alexander


Croft, Brigadier-General Sir H.
Hall, George H. (Merthyr Tydvil)
Lumley, Captain Lawrence R.


Crooke, J. Smedley
Hall, Capt. W. D'Arcy (Brecon)
Lunn, William


Crookshank, Capt. H. C. (Gainsb'ro)
Hamilton, Sir George (Ilford)
Lyons, Abraham Montagu


MacAndrew, Lieut. Col. C. G. (Partick)
Peto, Geoffrey K. (W'verh'pt'n, Bliston)
Stanley, Hon. O. F. G. (Westmorland)


Macdonald, Gordon (Ince)
Pickering, Ernest H.
Stevenson, James


McEntee, Valentine L.
Pickford, Hon. Mary Ada
Stones, James


McEwen, Captain J. H. F
Potter, John
Strauss, Edward A.


McKie, John Hamilton
Powell, Lieut.-Col. Evelyn G. H.
Strickland, Captain W. F.


Maclay, Hon. Joseph Paton
Pownall, Sir Assheton
Stuart, Hon. J. (Moray and Nairn)


Maclean, Rt. Hn. Sir D. (Corn'll, N.)
Price, Gabriel
Sueter, Rear-Admiral Murray F.


McLean, Dr. W. H. (Tradeston)
Procter, Major Henry Adam
Sugden, Sir Wilfrid Hart


Macmillan, Maurice Harold
Pybus, Percy John
Tate, Mavis Constance


Maitland, Adam
Ramsay, Alexander (W. Bromwich)
Templeton, William P.


Makins, Brigadier-General Ernest
Ramsden, E.
Thomas, Rt. Hon. J. H. (Derby)


Mallalieu, Edward Lancelot
Rankin, Robert
Thomas, James P. L. (Hereford)


Mander, Geoffrey le M.
Ratcliffe, Arthur
Thompson, Luke


Manningham-Buller, Lt.-Col. Sir M.
Rea, Walter Russell
Thomson, Sir Frederick Charles


Margesson, Capt. Henry David R.
Reid, William Allan (Derby)
Thorne, William James


Martin, Thomas B.
Rentoul, Sir Gervais S.
Tinker, John Joseph


Mason, Col. Glyn K. (Croydon, N.)
Reynolds, Col. Sir James Philip
Titchfield, Major the Marquess of


Mayhew, Lieut.-Colonel John
Roberts, Aled (Wrexham)
Todd, Capt. A. J. K. (B'wick-on-T.)


Millar, Sir James Duncan
Robinson, John Roland
Turton, Robert Hugh


Mills, Sir Frederick (Leyton, E.)
Rosbotham, S. T.
Wallace, Captain D. E. (Hornsey)


Mills, Major J. D. (New Forest)
Ross Taylor, Walter (Woodbridge)
Wallace, John (Dunfermline)


Milne, Charles
Rothschild, James A. de
Ward, Lt.-Col. Sir A. L. (Hull)


Milne, John Sydney Wardlaw-
Runciman, Rt. Hon. Walter
Ward, Irene Mary Bewick (Wallsend)


Mitchell, Harold P.(Br'tf'd & Chisw'k)
Russell, Albert (Kirkcaldy)
Ward, Sarah Adelaide (Cannock)


Mitchell, Sir W. Lane (Streatham)
Russell, Alexander West (Tynemouth)
Warrender, Sir Victor A. G.


Mitcheson, G. G.
Russell, Hamer Field (Sheffield, B'tside)
Watt, Captain George Steven H.


Morris, Owen Temple (Cardiff, E.)
Russell, Richard John (Eddisbury)
Wedgwood, Rt. Hon. Josiah


Morris-Jones, Dr. J. H. (Denbigh)
Rutherford, Sir John Hugo
White, Henry Graham


Muirhead, Major A. J.
Salmon, Major Isldore
Whiteside, Borras Noel H.


Munro, Patrick
Salt, Edward W.
Williams, David (Swansea, East)


Nathan, Major H. L.
Samuel, Sir Arthur Michael (F'nham)
Williams. Edward John (Ogmore)


Nation, Brigadier-General J. J. H.
Samuel, Rt. Hon. Sir H. (Darwen)
Williams, Herbert G. (Croydon, S.)


Nicholson, Godfrey (Morpeth)
Shakespeare, Geoffrey H.
Williams, Dr. John H. (Lianelly)


North, Captain Edward T.
Shaw, Helen B. (Lanark, Bothwell)
Williams, Thomas (York, Don Valley)


Nunn, William
Shaw, Captain William T. (Forfar)
Wills, Wilfrid D.


O'Connor, Terence James
Simmonds, Oliver Edwin
Wilson, Clyde T. (West Toxteth)


O'Neill, Rt. Hon. Sir Hugh
Skelton, Archibald Noel
Withers, Sir John James


Palmer, Francis Noel
Smiles, Lieut.-Col. Sir Waiter D.
Wood, Rt. Hon. Sir H. Kingsley


Parkinson, John Allen
Smithers, Waldron
Worthington, Dr. John V.


Patrick. Colin M.
Southby, Commander Archibald R. J.
Young, Rt. Hon. Sir Hilton (S'v'noaks)


Pearson, William G.
Spencer, Captain Richard A.
Young, Ernest J. (Middlesbrough, E.)


Peters, Dr. Sidney John
Spender-Clay, Rt. Hon. Herbert H.



Petherick, M.
Stanley, Lord (Lancaster, Fylde)
TELLERS FOR THE AYES.—




Sir George Penny and Lord Erskine.


NOES.


Allen, William (Stoke-on-Trent)
Donner, P. W.
Macquisten, Frederick Alexander


Amery, Rt. Hon. Leopold C. M. S.
Dower, Captain A. V. G.
Nicholson, Rt. Hn. W. G. (Petersf'ld)


Applin, Lieut.-Col. Reginald V. K.
Duckworth, George A. V.
Peto, Sir Basil E. (Devon, Barnstaple)


Apsley, Lord
Duncan, James A. L. (Kensington, N.)
Raikes, Henry V. A. M.


Baillie, Sir Adrian W. M.
Emmott, Charles E. G. C.
Ramsay, Capt. A. H. M. (Midlothian)


Balfour, Capt. Harold (I. of Thanet)
Fermoy, Lord
Rawson, Sir Cooper


Beauchamp, Sir Brograve Campbell
Fox, Sir Gifford
Renwick, Major Gustav A.


Belt, Sir Alfred L.
Gault, Lieut.-Col. A. Hamilton
Scone, Lord


Blaker, Sir Reginald
Gritten, W. G. Howard
Smith, Sir Jonah W. (Barrow-in-F.)


Boothby, Robert John Graham
Groves, Thomas E.
Smith-Carington, Neville W.


Bower, Lieut.-Com. Robert Tatton
Henderson, Sir Vivian L. (Cheimsford)
Somerville, Annesley A. (Windsor)


Bracken, Brendan
Hepworth, Joseph
Sotheron-Estcourt, Captain T. E.


Braithwaite, Maj. A. N. (Yorks, E.R.)
Horobin, Ian M.
Stourton, Hon. John J.


Braithwaite, J. G. (Hillsborough)
Hunter, Capt. M. J. (Brigg)
Taylor, Vice-Admiral E. A.(Pd'gt'n, S.)


Brown, Brig.-Gen. H. C.(Berks., Newb'y)
Hurst, Sir Gerald B.
Touche, Gordon Cosmo


Burton, Colonel Henry Walter
Hutchison, W. D. (Essex, Romf'd)
Train, John


Cayzer, Sir Charles (Chester, City)
Joel, Dudley J. Barnato
Wayland, Sir William A.


Conant, R. J. E.
Lamb, Sir Joseph Quinton
Wells, Sydney Richard


Cook, Thomas A.
Lambert, Rt. Hon. George
Williams, Charles (Devon, Torquay)


Courtauld, Major John Sewell
Latham, Sir Herbert Paul
Windsor-Clive, Lieut.-Colonel George


Courthope, Colonel Sir George L.
Leigh, Sir John
Wragg, Herbert


Craven-Ellis, William
Leighton, Major B. E. P.



Dalkeith, Earl of
Lennox-Boyd, A. T.
TELLERS FOR THE NOES.—


Davison, Sir William Henry
Levy, Thomas
Lieut.-Colonel Acland-Troyte and


Dixey, Arthur C. N.
Lymington, Viscount
Mr. Michael Beaumont.

Sir WALTER GREAVES-LORD: I beg to move, in page 16, line 5, at the end, to add the words:
and Section twenty-eight of the said Act relating to the production of instruments transferring land shall cease to have effect until such date as Parliament shall hereafter determine, and shall be deemed not to have had effect until such date.
The effect of this Amendment is to bring Section 28 of the Act of 1931 into line with the Government's action on Section 10 of that Act. Section 10 is the operative Section dealing with the tax, and Section 28 is a part of the machinery by which that tax is calculated and ultimately put into operation, and
it does seem rather ridiculous to suspend the tax and at the same time continue a piece of machinery which is merely a source of irritation, a clog upon transfers of land, and a means of putting money into the pockets of solicitors with no advantage to the revenue at all. It is interesting, as a matter of fact, to know that it is the solicitors who want this Amendment made. [Interruption.] An hon. Member opposite wants to know what is behind it. There is one very definite thing behind it. The country should take no step which prevents or clogs the free transfer of land, and there can be nothing more calculated to do so than the operation of Section 28. What that Section demands is this, that upon every transfer and sale of the fee simple of land, or the grant of any lease of land for a term of seven or more years, or any transfer or sale of such a lease, the instrument by means of which the transfer is effected or the lease granted shall be produced to the Commissioners of Inland Revenue within 30 days. If it is not produced within 30 days there is a penalty of £10 for non-production. There is a further provision that the Commissioners shall put a stamp upon it —not a monetary stamp, but a stamp de noting that the document has been pro duced—and unless it can be shown that the document bears that stamp, which is not a revenue stamp at all, it is to be taken as not complying with the pro visions of the Stamp Act regarding the revenue, although the full duty has been paid upon the transfer.
Upon every transfer of land, grant of a lease or transfer of a lease, the solicitors acting for the parties have to take the document to this office, accompanied by a form with a whole heap of particulars, which are quite as iniquitous as was the old Form IV, they have to deposit those particulars and they have to charge their clients for preparing the particulars. In that way we add to the cost of conveyance and clog conveyance, and the only persons who derive any satisfaction out of it are the solicitors who get costs for doing it. In addition, of course, we have to have a certain number of officials to keep the register and the particulars which are handed in. So far from its being a revenue-producing Section, it is an expenditure provision which causes expense but brings in no revenue. If we
are to complete the thing properly it is necessary to make this provision retrospective, for this reason: documents have had to be produced ever since the Finance Act was passed, and if we do not make it retrospective then,, even though we suspend the operation of this Section alongside the suspension of Section 10, in every transfer in the future solicitors will have to make search on behalf of their clients to see whether, during the last 12 months, documents had been produced in that way, and unless they could find that documents had been so produced there might be a rather serious flaw with regard to documents which would appear to be otherwise unstamped.
So long as the Land Tax Sections are suspended, and so long, as the Lord President of the Council said, as valuation is also suspended, there is no purpose in keeping Section 28, except that the Land Tax provisions are kept by Clause 24 of the present Finance Bill. In these circumstances I suggest that it is in the interests of the freer transfer of land that this pure machinery provision should be suspended at the same time. It is purely an irritation, purely a clog, purely a. means of charging the clients of solicitors for expenses which the solicitors do not want to incur but which they have to charge if they Save to do the work. It is in the interests of the community and in the interests of economy, which is vital at the present time, that Section 28 should be suspended as well as Section 10.

Dr. MORRIS-JONES: Because my hon. and learned Friend has expressed so clearly the reasons for bringing forward this Amendment, because I feel that the reasonableness of the request must appeal to the Government, and because we are behind time, I will content myself with formally seconding the Amendment.

Captain DOWER: I will occupy the Committee only a minute or two in sup porting the Amendment. The point at issue is that although the valuation has been suspended this Department is still functioning, and costing the country several thousand pounds a year. The object, as we have heard, is to register sales of land and the grant of leases of seven years or over. This is the register upon which valuations are to be made for a future imposition of a tax upon land, and if it is the intention, as I
understood from the Lord President of the Council, that such a tax will probably not be imposed during the present Parliament, then the work of and the expenditure upon this Department will be entirely wasted. During the short time I have had the honour and privilege of being a Member of this House I have understood that one of the vital necessities of the time is to secure every possible economy in national expenditure. Many of us have to go to our constituents and say, "We recognise the great burdens, the tremendous taxes, which you have to bear, but we have no alternative"; and if we make statements of that kind, at any rate we should put our own house in order by effecting every possible economy. I have been told that the only use of this Department, except for the future taxation of land, is in those cases where the Government re quire to buy a piece of land for their own purposes. Do not tell me that every transaction in land throughout the length and breadth of the country must be registered in order that in the one case in 100,000 where the Government require to buy land the register should be at their disposal!
There is another point, which is rather a grave one, in my opinion, because I do not mind admitting that I should like, at the proper time, to see the land tax proposals wiped out. Hon. Members on the Opposition benches frequently say that a Labour Government will be in power in a few years time, and if this Department is continued there is no question that such a Government would be in a very powerful position as regards imposing a land tax. They would say, "A National Government, with a vast majority, has been in power; it could have done anything it liked; admittedly it postponed the valuation on the grounds of economy, but it continued the Registration Department although it cost money, and by so doing it has admitted that to all intents and purposes it is approving of this future tax which is to be put on land." My hon. and learned Friend has already referred to the legal fees attached to these registrations, but, in addition, elaborate plans have to be prepared in certain cases, and all these requirements are a clog in the wheel as regards the transfer of land, with no
purpose whatever. If only on the ground of the dire necessity of setting an example in public economy I hope that my right hon. Friend will put an end to a process involving an expenditure which, though small, is wasteful and extravagant.

Mr. GEOFFREY ELLIS: I wish to support the Amendment. To-day land is passing into many hands and requirements of this kind add to the difficulty of transferring it. We have here an opportunity to make the transfer of land less costly.

6.0 p.m.

The PARLIAMENTARY SECRETARY to the BOARD of TRADE (Mr. Hore-Belisha): My hon. and learned Friend the Member for Norwood (Sir W. Greaves-Lord) has argued this Amendment with great legal knowledge as one would expect, and one is grateful not only to him for so clearly putting his ease, but also to those hon. Gentlemen who have supported him for the brevity with which they have done so. This Clause which my hon. Friend wishes to suspend is on a different footing from Section 10 of the Finance Act of 1931, which Section has never come into operation. No Land Value Tax has ever been exacted under Sec tion10, but this particular Section has been in operation since 1st September, 1931. The second respect in which it may be contrasted with Clause 10 is that it has no necessarily practical relation with a Land Value Tax at all, and it simply raises the principle as to whether certain particulars concerning transactions in land should be furnished to the Commissioners of Inland Revenue. My hon. and learned Friend the Member for Norwood called attention to the trouble which he said was caused to those engaged in these transactions in land by having to supply the particulars in question to the Inland Revenue. But the hon. and learned Member did not read the whole operative part of the Section from which he quoted, no did he refer to the Schedule which depends on the Section. Perhaps the Committee will allow me to read the relevant passages in order to show the amount of care which has been taken to avoid the trouble of which the hon. and learned Member for Norwood speaks. The words of the Section are:
On the occasion of any transfer on sale of the fee simple of land or the grant of any lease of land for a term of seven or more years or any transfer on sale of any such lease,
the instrument already in existence, has to be produced to the Commissioners of Inland Revenue. There can be no trouble about that. It can be sent either to Somerset House direct or through any local post office. In addition to the instrument., all that the person concerned has to provide is either an abstract of the instrument or a copy of the instrument or neither of those things, merely holding himself ready to give information during a period of six months about the instrument if he is called upon to do so. When my hon. and learned Friend the Member for Norwood says that there has necessarily been additional expense thrown upon the person concerned to file the detailed information of which he spoke he must have been under some misapprehension because the Schedule clearly refrains from laying down such a requirement. All that the person has to do is to wait until he is asked a question during the period of six months.

Sir W. GREAVES-LORD: Certainly, there are other particulars which he must supply. There is something even more dangerous because he has to furnish on demand such information as the Com missioners require him to furnish.

Mr. HORE-BELISHA: My hon. and learned Friend surely is stretching a point, because if he looks at paragraph (c) he will see that if he exercises the option mentioned he has—it is true —to hold himself open to give any information that may be required, but that relates only to the information which is in the instrument, and which is intended to enable the Commissioners to trace the property, and the person cannot be called upon to give any information outside that transaction.

Sir W. GREAVES-LORD: If the Parliamentary Secretary will refer to paragraph (vii) of the Second Schedule of the Finance Act, 1931, he will find that the person concerned may be called upon to furnish with the instrument particulars
of any minerals, mineral rights, sporting rights, timber or easements reserved, and of any restrictions, covenants or conditions affecting the value of the estate or interest transferred or granted.

Mr. HORE-BELISHA: With great respect, I submit that the hon. and learned Gentleman has read particulars contained in paragraph (a) and I have already stated that that was an optional paragraph. The hon. and learned Member then proceeded to say that I am under a misapprehension, and he read out all that paragraph again. The person concerned may either furnish those particulars which my hon. and learned Friend the Member for Norwood characterised as Form IV, or he may in the alternative hold himself ready to answer any questions which may be addressed to him. In those circum stances, what becomes of the argument of my hon. and learned Friend that a solicitor has to be consulted in every case? Can my hon. and learned Friend produce any single case in which someone has been called upon to provide such particulars and who has been placed in any difficulty on that account? No serious complaints have been made at all, and the letter of the Law Society was written under a complete misapprehension, because they must realise that the provision of the particulars in Paragraph (a) is optional.

Mr. MACQUISTEN: Is the Parliamentary Secretary not aware that "optional" means at the option of the Commissioners, and that the unfortunate man who has to provide the return has no chance?

Mr. JANNER: It is necessary for the solicitor in each instance to produce the instrument so that a stamp may be placed, upon it. It is not a question of the particulars, but the production of the deed, and this has to be produced by the solicitor in each of these cases.

Mr. HORE-BELISHA: I think the Committee will realise that I am being asked two separate questions at the same time. I began my remarks by saying that in the first place the person concerned had to provide the instrument and that cannot impose upon him any additional expense, because the document is in existence. It is then argued that this procedure is at the option of the Commissioners.

Mr. MACQUISTEN: That is so in practice.

Mr. HORE-BELISHA: My hon. and learned Friend the Member for Argyll-
shire (Mr. Macquisten) is skilled in these matters, but perhaps he will forgive me if I ask him to look at the second Schedule of the Act, which says:
Any person … may, at his option.
That is at the option of the person. I can quite understand that hon. and learned Members of this House are very anxious to spare their clients expense, and I think this discussion will have made it plain to the public that anyone who thinks that a great deal of unnecessary inquisition is likely to be indulged in under this procedure is under a complete misapprehension. Already the Clause has served a useful purpose. It is in operation and it is not costing the taxpayer any money, but on the contrary it is saving the taxpayers money. This Clause is quite different from the one we have just disposed of, and I hope that in these circumstances my hon. and learned Friend the Member for Norwood, having drawn attention to this matter very forcibly—I admit it is of great public interest—will consent to withdraw his Amendment.

Captain DOWER: The Parliamentary Secretary has told us that this Clause has nothing to do with the Land Value Tax. If that is so, how is it that at Somerset House there is written in large letters over the office the words "Land Value Tax"?

Question, "That those words be there added," put, and negatived.

Mr. RHYS DAVIES: I beg to move, in page 16, line 5, at the end, to add the words:
(2) The Commissioners of Inland Revenue shall be hereby freed, discharged, and indemnified from all penalities and disabilities whatsoever incurred by them by reason of their failure to observe and carry out the duties imposed on them under the provisions of Part III of the said Act.
I am glad to have this opportunity of raising a first-class constitutional issue. The Act of Parliament imposing these duties is still in existence, and this tax will be in existence provisionally until the Bill with which we are now dealing has passed through all its stages in both Houses of Parliament. The Chancellor of the Exchequer not very long ago stated that the Act of Parliament which is actually on the Statute Book was to be set aside, and in setting aside an Act
of Parliament he was doing something very serious so far as the Commissioners of Inland Revenue are concerned. In suspending statutory provisions which call upon State Departments and servants of the Crown to do certain things, should not provision be made in the present Bill for indemnifying them against declining to carry out the law? We are not willing to trust the present Government on this issue. They may decide to set aside the provisions of the law and then hold the Commissioners of Inland Revenue responsible for not carrying out that same law. That is a very important constitutional issue. It is passing strange that in this Parliament nearly every constitutional issue of first-class importance is left to the Labour party to maintain. I feel sure that what I have said will have convinced the Government Front Bench that they ought to accept this Amendment in order to make their own position clear for the future.

Mr. HORE-BELISHA: I acknowledge the spirit in which this Amendment has been moved. My hon. Friend says that this matter is one of great constitutional importance, and, of course, it would be a matter of great constitutional importance if all the Commissioners of Inland Revenue were liable to be put, as he fears, in gaol for not carrying out the valuation under the Act. I listened in vain, however, for any reason why they should become liable to these dire penalties. A valuation under the Act of 1931 had to take place within a reasonable time after the valuation date, and in the year 1933–34 the tax had to be levied on the basis of that valuation. The time has not yet come when the tax could be levied. In the meantime, my right hon. Friend the Chancellor of the Exchequer announced that he was suspending all work upon the valuation, and, indeed, in a Supplementary Estimate of the 2nd of February this year a sum which had been voted in the first Budget of last year for the expenses of the officials who were to carry out this valuation was diverted. Finally, we hope this afternoon to have the seal of the House of Commons, and subsequently of the whole machinery of the Constitution, upon our proposals. In these circumstances, to suggest that anyone can bring an action against the Commissioners is, I think, a little far-fetched.
However, we have had the advantage of hearing the case presented. We are advised on the highest authority that the case is not a sound one, and, therefore I hope that the Amendment will not be pressed.

Mr. ANEURIN BEVAN: The party to which I have the honour to belong raised this issue not long ago on the Motion for the Adjournment of the House. An announcement was made by the Chancellor of the Exchequer, in reply to questions put in the House, that it was his intention to discontinue the land valuation which had been started, and to dismiss the persons who had been employed by the Department. We should have liked to see the Attorney-General on the bench this afternoon, so that we might have had from him a full explanation of the constitutional issues involved. I do not expect the Parliamentary Secretary to the Board of Trade or the Financial Secretary to the Treasury to be able to give us a complete account of the law involved in the matter, and I am not going to presume that I can raise all the legal issues which undoubtedly underlie this case, but I think the Committee ought to be in possession of the facts. The facts are that, after a very important Debate in the House on the first Finance Bill of the year 1930–31, the House decided to impose a tax of 1d. in the £ upon land value. The tax of 1d. was included in the Finance Bill in order to secure the passage of the Bill into law without the veto of the Lords being exercised against it. The purpose of the tax was to secure the valuation of the land. If the valuation had been included in the Finance Bill without a tax, it could not, so I am informed, have become law without the consent of the other Chamber, and we are well aware that the landed interest represented in the other House was so strong that it would never have passed.
In consequence of that fact, the valuation of land was not included in the first Finance Bill of 1931 as an administrative part of the Land Value Tax, but was an obligation imposed upon the Government by the Act itself. That is the crux of the whole matter. If the House had passed the tax and had left the valuation of land as an administrative matter in the hands of the Government, the Government would have been perfectly en-
titled, without asking the House at all, to stop the valuation of land, and the only criticism that could have been exercised would have been to indict the appropriate Department. The valuation of land was, however, a legal obligation imposed by Statute upon the Government. The appropriate Section reads as follows:
Subject to the provisions of this Section, the Commissioners of Inland Revenue…. shall, as soon as may be after every valuation date"—
and the valuation date is the 1st January of this year—
cause to be ascertained, as at that date, the land value of every land unit.
The excuse may be advanced that the words
as soon as may be
give the Government the right to postpone indefinitely the commencement of the valuation. But the Commissioners of Inland Revenue had already interpreted the elasticity of these words, because they had started the valuation, so that the Government are now estopped from advancing that as a reason for not going on with the Act. The Commissioners had already started the valuation and had employed a large body of persons upon it, so that the words
as soon as may be
now disappear as a means of defence for the Government. It may be argued that the funds provided by Parliament for this purpose had been exhausted, that the Government could refuse to provide further funds, and that consequently we should have no redress until the House had again voted money for this purpose. I am informed, however, that the moneys voted by Parliament for this purpose have not yet been fully expended, and that some money still remains.
We are not raising this issue because we think that the House is in favour of land valuation. The present House of Commons is undoubtedly against land valuation and against land taxes. But it is the duty of the Government of the day to repeal an. Act of Parliament by a legislative instrument brought before the House of Commons, and not to assume that the House, because it is against an Act of Parliament, exempts the Government from the need for repealing it in the ordinary way. If the Government are to say, "We think the
House of Commons is not in favour of this piece of legislation—or is in favour of it—and we will act accordingly"—if that is the way in which our legislation is to be carried on, why not dissolve the House of Commons entirely, and let the Government for the next five years interpret what they consider to be the will of the House? If the Government did not desire to proceed with the valuation of the land—a valuation which was imposed as a legal obligation upon the Government by Statute—they ought to have brought a Bill before the House, which could have been debated. Why was that not done?

The CHAIRMAN (Sir Dennis Herbert): I must remind the hon. Member that the Amendment does not deal with any point for which Members of the Government are responsible.

Mr. BEVAN: I beg pardon; it is the Inland Revenue Commissioners. I was simply using for the moment a wrong term, but obviously the Government is involved.

The CHAIRMAN: What I want the hon. Member to bear in mind is that the action of the Government is not a matter with which we are concerned here. We are concerned here with the question whether there is a legal liability or not on certain servants of the Government.

6.30 p.m.

Mr. BEVAN: We are discussing an Amendment to indemnify the Inland Revenue Commissioners from failing to carry out the law, and, as we understand it, the Inland Revenue Commissioners proceeded, upon instructions from the Treasury, not to carry out the law. We were told by the Chancellor of the Exchequer that the Inland Revenue Commissioners did not stop the valuation of land because they woke up one day and said, "We do not think we will go on with this any more. We have had enough." They stopped, on the instructions of the Chancellor of the Exchequer. The Chancellor and the Inland Revenue Commissioners have connived at the violation of an Act of Parliament, and the purpose of the Amendment is to indemnify them against the pressure brought to bear by the Chancellor of the Exchequer. The reason why this was done is not because the law allows the Inland Revenue Com-
missioners to cease the valuation, but because at that time relations were very strained inside the Government.

The CHAIRMAN: I must ask the hon. Member to pay attention to the Rulings which I have been trying to give. I want him to understand that on this Amendment he cannot discuss the question of the conduct of the Government. Whether the Commissioners have acted on instructions from the Government or whether the Government, in any instructions they have given, have done what he thinks they ought not to have done is not part of the Question that is before the Committee.

Sir S. CRIPPS: I submit that the reason that actuated the Commissioners of Inland Revenue in doing this is a very material matter. In certain circumstances it might well be argued that, if they did it on the instructions of the Government, there should be no penalty but, if they did it of their own volition contrary to the instructions of the Government, there might be penalties and pains due as the result of their action. Therefore, it is material to ascertain why the Commissioners of Inland Revenue ceased to carry out this valuation before one can determine whether or not it is necessary to oppose the Clause indemnifying them.

The CHAIRMAN: If the hon. Member had been arguing on those lines, I should not have called him to order. It would have been relevant. But it is not relevant to discuss whether the action the Government took was praiseworthy or not.

Sir S. CRIPPS: Are we to understand that one is not allowed, when mentioning the action of the Government, to criticise it?

The CHAIRMAN: Certainly not, and the hon. and learned Gentleman knows it.

Sir S. CRIPPS: I must ask for a Ruling on this point, because what my hon. Friend was doing was pointing out that the Government had given to the Commissioners of Inland Revenue certain instructions in the matter, as has been admitted by the Chancellor of the Exchequer. He was then commenting upon the action of the Government in giving those instructions, and I submit that he is perfectly entitled to do so.

The CHAIRMAN: As to the first part, I quite agree that the hon. Member was entitled, but in my opinion he was straying beyond the limits.

Mr. DENMAN: May I submit that the Debate has shown that the whole Amendment is out of order in this place? The Clause that it seeks to amend is for the suspension of the Land Tax and the postponement of certain provisions of Part II, and the Amendment does something entirely different. It seeks to permit the Commissioners of Inland Revenue to fail to observe and to carry out duties under Part III in general without any penalties. Surely that is so widely different from the subject matter of the Clause that it is out of order in this place.

Sir S. CRIPPS: Is it in order, when you, Sir Dennis, have called an Amendment, for an hon. Member to rise and say it is not in order to call it?

The CHAIRMAN: It is undoubtedly quite in order for any hon. Member in the course of the discussion to raise a point of Order. On the point raised by the hon. Member, it is quite possible that it might have been more convenient to move this as a new Clause, but I do not think it is necessary to shut it out here, and I think I must allow the discussion to proceed.

Sir REGINALD BANKS: Is not the short answer that that which would be relevant—

The CHAIRMAN: I have disposed of that.

Mr. BEVAN: If, as the Parliamentary Secretary has contended, the Inland Revenue Commissioners have not been guilty of an illegal act in ceasing valuation, there is no need to indemnify them. If, on the other hand, they have been guilty of an illegal act, this indemnification is necessary, and I was addressing myself to the case that the Inland Revenue Commissioners have been guilty of an illegal act- and that the Government, in giving them instructions, have connived at the illegality. One of the reasons that obviously led the Government to take this action was that inside the Government there are Members who strongly favour land valuation, and it would be a source of great political embarrassment if a Bill were brought in repealing that portion of the Finance Act,
1931, in which land valuation occurs. The House of Commons ought to be jealous of its powers in this regard. I do not mind right hon. Gentlemen opposite disagreeing with me and carrying legislation to which I am strongly opposed, tout I think I am right in taking exception, and anyone who has the interests of the House at heart should take exception to an Act of Parliament being placed upon the Statute Book which imposes certain unpleasant obligations on the Government and to the Chancellor of the Exchequer going behind the back of Parliament, defying its will and setting aside an important Statute.

Sir S. CRIPPS: It is of extraordinary importance that the Committee should realise the reason why we have brought forward this Amendment. A great many things that were formerly considered unconstitutional have been done by the present Government. We have pointed them out from time to time, and we have pointed out that they will make useful precedents. This is one more useful precedent. Let me illustrate the sort of way in which a precedent of this kind might be used. A Tariff Commission has been set up to do certain things. Another Government comes in. It does not like tariffs and disbands the Tariff Commission without asking Parliament. It says, "We are sure we shall have a majority against tariffs." That is precisely what has happened in this case. The National Government, with a vast majority, can do it, but the National Government and people in the country should realise exactly what it is that has been done. A Minister of the Crown, without authority from Parliament, the matter never having been discussed in Parliament, has disbanded one of the Departments that was created by Parliament to do a particular job. That is another precedent which this Government has set up which may well be followed in the future if there is a change of Government. Any piece of work that has been set up by this Parliament may be brushed completely aside, and something else substituted for it.

Amendment negatived.

Question put, "That the Clause stand part of the Bill."

The Committee divided: Ayes, 343; Noes, 46.

Division No. 200.]
AYES.
[6.41 p.m.


Acland-Troyte, Lieut.-Colonel
Denville, Alfred
Inskip, Rt. Hon. Sir Thomas W. H.


Adams, Samuel Vyvyan T. (Leeds. W.)
Despencer-Robertson, Major J. A. F.
Jackson, Sir Henry (Wandsworth, C.)


Agnew Lieut.-Com. P. G.
Dickie, John P.
Jackson, J. C. (Heywood & Radcliffe)


Albery, Irving James
Donner, P. W.
Jamieson, Douglas


Allen, Lt.-Col. J. Sandeman (B'k'nh'd.)
Doran, Edward
Janner, Barnett


Allen, William (Stoke-on-Trent)
Dower, Captain A. V. G.
Jennings, Roland


Allen, Lt.-Col. Sir William (Armagh)
Drewe, Cedric
Jesson, Major Thomas E.


Applin, Lieut.-Col. Reginald V. K.
Duckworth, George A. V.
Joel, Dudley J. Barnato


Apsley Lord
Dugdale, Captain Thomas Lionel
Johnston, J. W. (Clackmannan)


Aske, Sir Robert William
Duggan, Hubert John
Jones, Sir G. W. H. (Stoke New'gton)


Astbury Lieut.-Com. Frederick Wolfe
Duncan, James A. L. (Kensington, N.)
Jones, Lawis (Swansea, West)


Astor, Maj. Hn. John J, (Kent, Dover)
Dunglass, Lord
Kerr, Hamilton W.


Atholl Duchess of
Eastwood, John Francis
Kirkpatrick, William M.


Atkinson Cyril
Edmondson, Major A. J.
Knatchbull, Captain Hon. M. H. R.


Bailey, Eric Alfred George
Elliot, Major Rt. Hon Walter E.
Knebworth, Viscount


Baldwin, Rt. Hon. Stanley
Ellis, Robert Geoffrey
Lamb, Sir Joseph Quinton


Balfour, George (Hampstead)
Elliston, Captain George Sampson
Latham, Sir Herbert Paul


Balniel, Lord
Elmley, Viscount
Law, Sir Alfred


Banks, Sir Reginald Mitchell
Emmott, Charles E. G. C.
Leckie, J. A.


Barclay-Harvey, C. M.
Emrys-Evans, P. V.
Leech, Dr. J. W.


Barton, Capt. Basil Kelsey
Entwistle, Cyril Fullard
Lees-Jones, John


Beauchamp, Sir Brograve Campbell
Erskine, Lord (Weston-super-Mare)
Leighton, Major B. E. P.


Beaumont, M. W. (Bucks., Aylesbury)
Essenhigh, Reginald Clare
Lennox-Boyd, A. T.


Beaumont, Hon. R.E.B. (Portsm'th.C.)
Falle, Sir Bertram G.
Levy, Thomas


Belt, Sir Alfred L.
Fermoy, Lord
Lewis, Oswald


Benn, sir Arthur Shirley
Fielden, Edward Brocklehurst
Liddall, Walter S.


Betterton, Rt. Hon. Sir Henry B.
Foot, Dingle (Dundee)
Lister, Rt. Hon. Sir Philip Cunliffe-


Bevan, Stuart James (Holborn)
Foot, Isaac (Cornwall, Bodmin)
Little, Graham-, Sir Ernest


Bird, Ernest Roy (Yorks., Skipton)
Ford, Sir Patrick J.
Llewellyn-Jones, Frederick


Blaker, Sir Reginald
Fox, Sir Gifford
Lloyd, Geoffrey


Blinded, James
Fremantle. Lieut. Colonel Francis E.
Lovat-Fraser, James Alexander


Borodale, Viscount
Fuller, Captain A. G.
Lumley, Captain Lawrence R.


Bossom, A. C.
Ganzoni, Sir John
Lyons, Abraham Montagu


Boulton, W. W.
Gault, Lieut.-Col. A. Hamilton
MacAndrew, Lieut.-Col. C. G.(Partlck)


Boyce, H. Leslie
Gibson, Charles Granville
McCorquodale, M. S.


Bralthwaite, J. G. (Hillsborough)
Gillett, Sir George Masterman
Macdonald, Capt. P. D. (I. of W.)


Brlant, Frank
Gilmour, Lt.-Col. Rt. Hon. Sir John
McEwen, Captain J. H. F.


Briscoe, Capt. Richard George
Gluckstein, Louis Halle
McKeag, William


Brackiebank, C. E. R.
Goff, Sir Park
McKie, John Hamilton


Brown, Ernest (Leith)
Gower, Sir Robert
McLean, Dr. W. H. (Tradeston)


Brown, Brig.-Gen. H. C.(Berks., Nawb'y)
Grattan-Doyle, Sir Nicholas
Macmillan, Maurice Harold


Browne Captain A. C.
Greaves-Lord, Sir Walter
Magnay, Thomas


Buchan, John
Grenfell, E. C. (City of London)
Maitland, Adam


Burghley, Lord
Gretton, Colonel Rt. Hon. John
Makins, Brigadier-General Ernest


Burnett, John George
Grimston, R. V.
Mander, Geoffrey le M.


Burton Colonel Henry Walter
Gritten, W. G. Howard
Manningham-Buller, Lt.-Col. Sir M.


Campbell, Edward Taswell (Bromley)
Guest, Capt. Rt. Hon. F. E.
Margetson, Capt. Henry David R.


Campbell, Rear-Adml. G. (Burnley)
Gunston, Captain D. W.
Martin, Thomas B.


Campbell-Johnston, Malcolm
Guy, J. C. Morrison
Mason, David M. (Edinburgh, E.)


Caporn, Arthur Cecil
Hales, Harold K.
Mason, Col. Glyn K. (Croydon, N.)


Cassels, James Dale
Hall, Capt. W. D.'Arcy (Brecon)
Mayhew, Lieut.-Colonel John


Cautley, Sir Henry S.
Hamilton, Sir George (Ilford)
Millar, Sir James Duncan


Cayzer, Sir Charles (Chester, City)
Hamilton, Sir R. W.(Orkney & Ztl'nd)
Mills, Sir Frederick (Leyton, E.)


Cayzer, Maj. Sir H. R. (Prtsmth., S.)
Hammersley, Samuel S.
Mills, Major J. D. (New Forest)


Cazalet, Thelma (Islington, E.)
Hanley, Dennis A.
Milne, Charles


Cazalet Capt. V. A. (Chippenham)
Hannon, Patrick Joseph Henry
Milne, John Sydney Wardlaw-


Chalmers, John Rutherford
Harbord, Arthur
Mitchell, Harold P. (Br'tf'd & Chisw'k)


Chapman, Col. R.(Houghton-le-Spring)
Hartland, George A.
Mitcheson, G. G.


Chapman, Sir Samuel (Edinburgh, S.)
Harvey, George (Lambeth, Kenn'gt'n)
Moreing, Adrian C.


Chorlton, Alan Ernest Leofric
Harvey, Major S. E. (Devon, Totnes)
Morris, Owen Temple (Cardiff, E.)


Christie, James Archibald
Haslam, Sir John (Bolton)
Morrison, William Shepherd


Clarry Reginald George
Headlam, Lieut.-Col. Cuthbert M.
Muirhead. Major A. J.


Clayton, Dr. George C.
Hellgers, Captain F. F. A.
Munro, Patrick


Cobb, Sir Cyril
Henderson, Sir Vivian L. (Chelmsford)
Nation, Brigadier-General J. J. H.


Cochrane, Commander Hon. A. D.
Heneage, Lieut.-Colonel Arthur P.
Newton, Sir Douglas George C.


Colman, N. C. D.
Hepworth, Joseph
North, Captain Edward T.


Colville, John
Hills, Major Rt. Hon. John Waller
Nunn, William


Conant, R. J. E.
Hope, Capt. Arthur O. J. (Aston)
O'Connor, Terence James


Cook, Thomas A.
Hope, Sydney (Chester, Staiybridge)
O'Neill, Rt. Hon. Sir Hugh


Cooke, Douglas
Hore-Belisha, Leslie
Palmer, Francis Noel


Copeland, Ida
Hornby, Frank
Patrick, Colin M.


Courthope, Colonel Sir George L.
Home, Rt. Hon. Sir Robert S.
Pearson, William G.


Craddock, Sir Reginald Henry
Horobin, Ian M.
Penny, Sir George


Craven-Ellis, William
Horsbrugh, Florence
Percy, Lord Eustace


Crooke, J. Smedley
Howard, Tom Forrest
Peters, Dr. Sidney John


Crookshank, Capt. H. C. (Galnsb'ro)
Hudson, Capt. A. U. M. (Hackney, N.)
Petherick, M.


Cruddas, Lieut.-Colonel Bernard
Hudson, Robert Spear (Southport)
Peto, Sir Basil E. (Devon, Barnstaple)


Culverwell, Cyril Tom
Hume, Sir George Hopwood
Peto, Geoffrey K.(W'verh'pt'n, Bilst'n)


Dalkeith, Earl of
Hunter, Dr. Joseph (Dumfries)
Potter, John


Davidson, Rt. Hon. J. C. C.
Hunter, Capt. M. J. (Brigg)
Powell, Lieut.-Col. Evelyn G. H.


Davies, Maj. Geo. F.(Somerset, Yeovil)
Hurst, Sir Gerald B.
Pownall, Sir Assheton


Davison, Sir William Henry
Hutchison, Maj.-Gen. Sir R.(M'tclae)
Procter, Major Henry Adam


Denman, Hon. R. D.
Hutchison, W. D. (Essex, Romford)
Pybus, Percy John




Raikes, Henry V. A. M.
Shakespeare, Geoffrey H.
Thompson, Luke


Ramsay, Alexander (W. Bromwich)
Shaw, Helen B. (Lanark, Bothwell)
Thomson, Sir Frederick Charles


Ramsay, Capt. A. H. M. (Midlothian)
Shaw, Captain William T. (Fortar)
Thorp, Linton Theodore


Ramsden, E.
Shepperson, Sir Ernest W.
Titchfield, Major the Marquess of


Rankin, Robert
Simmonds, Oliver Edwin
Todd, Capt. A. J. K. (B' wick-on-T.)


Ratcliffe, Arthur
Slater, John
Todd, A. L. S. (Kingswinford)


Rawson, Sir Cooper
Smiles, Lieut.-Col. Sir Walter D.
Touche, Gordon Cosmo


Ray, Sir William
Smith, Sir Jonah W. (Barrow-in-F.)
Train, John


Rea, Walter Russell
Smith, Louis W. (Sheffield, Hallam)
Turton, Robert Hugh


Reed, Arthur C. (Exeter)
Smith, R. W. (Aberd'n & Kinc'dine, C.)
Wallace, John (Dunfermilne)


Reid. David D. (County Down)
Smith-Carington, Neville W.
Ward, Lt.-Col. Sir A. L. (Hull)


Reid, William Allan (Derby)
Smithers, Waldron
Ward, Irene Mary Bewick (Wailsend)


Rentoul, Sir Gervais S.
Somerville, Annesley A (Windsor)
Ward, Sarah Adelaide (Cannock)


Renwick, Major Gustav A.
Somerville, D. G. (Willesden, East)
Wells, Sydney Richard


Reynolds, Col. Sir James Philip
Sotheron-Estcourt, Captain T. E.
Weymouth, Viscount


Rhys, Hon. Charles Arthur U.
Southby, Commander Archibald R. J.
Whiteside, Borras Noel H.


Roberts, Aled (Wrexham)
Spears, Brigadier-General Edward L.
Williams, Herbert G. (Croydon, S.)


Roberts, Sir Samuel (Ecclesall)
Spencer, Captain Richard A.
Wills, Wilfrid D.


Robinson, John Roland
Spender-Clay, Rt. Hon. Herbert H.
Wilson, Clyde T. (West Toxteth)


Rosbotham, S. T.
Stanley, Hon. O. F. G. (Westmorland)
Windsor-Clive, Lieut.-Colonel George


Runge, Norah Cecil
Stones, James
Winterton, Rt. Hon. Earl


Russell, Alexander West (Tynemouth)
Stourton, Hon. John J.
Wise, Alfred R.


Russell, Hamer Field (Sheffield, B'tside)
Strauss, Edward A.
Withers, Sir John James


Russell, Richard John (Eddisbury)
Strickland, Captain W. F.
Wood, Rt. Hon. Sir H. Kingsley


Rutherford, Sir John Hugo
Stuart, Hon. J. (Moray and Nairn)
Wood, Sir Murdoch McKenzie (Banff)


Salmon, Major Isidore
Sueter, Rear-Admiral Murray F.
Worthington, Dr. John V.


Salt, Edward W.
Sugden, Sir Wilfrid Hart
Young, Rt. Hon. Sir Hilton (S'v'noaks)


Samuel, Sir Arthur Michael (F'nham)
Sutcliffe, Harold
Young, Ernest J. (Middlesbrough, E.)


Samuel, Rt. Hon. Sir H. (Darwen)
Tate, Mavis Constance



Samuel, Samuel (W'dsworth, Putney)
Taylor, Vice-Admiral E.A.(P'dd'gt'n, S.)
TELLERS FOR THE AYES.-


Sandeman, Sir A. N. Stewart
Templeton, William P.
Captain Sir George Bowyer and


Savery, Samuel Servington
Thomas, James P. L. (Hereford)
Sir Victor Warrender.


Scone, Lord
Thomas, Major L. B. (King's Norton)





NOES.


Adams, D. M. (Poplar, South)
Griffiths, T. (Monmouth, Pontypool)
Milner, Major James


Attlee, Clement Richard
Grundy, Thomas W.
Nathan, Major H. L.


Bevan, Aneurin (Ebbw Vale)
Hall, F. (York, W.R., Normanton)
Parkinson, John Allen


Brown, C. W. E. (Notts., Mansfield)
Hall, George H. (Merthyr Tydvil)
Pickering, Ernest H.


Buchanan, George
Harris, Sir Percy
Price, Gabriel


Cape, Thomas
Hicks, Ernest George
Salter, Dr. Alfred


Cocks, Frederick Seymour
Hirst, George Henry
Tinker, John Joseph


Cove, William G.
Holdsworth, Herbert
Wallhead, Richard C.


Cowan, D. M.
Jenkins, Sir William
Williams, David (Swansea, East)


Cripps, Sir Stafford
Jones, Morgan (Caerphilly)
Williams, Edward John (Ogmore)


Daggar, George
Kirkwood, David
Williams, Dr. John H. (Llanelly)


Davies, Rhys John (Westhoughton)
Lansbury, Rt. Hon. George
Williams, Thomas (York, Don Valley)


Duncan, Charles (Derby, Claycross)
Leonard, William



Edwards, Charles
Lunn, William
TELLERS FOR THE NOSE—


Graham, D. M. (Lanark, Hamilton)
McEntee, Valentine L.
Mr. Groves and Mr. Cordon


Greenwood, Rt. Hon. Arthur
Mallalieu, Edward Lancelot
Macdonald


Grenfell, David Rees (Glamorgan)
Maxton, James



Question, "That the Clause be read a Second time," put, and agreed to.

CLAUSE 25.—(Power to make advances to Road Fund for meeting expenditure in connection with expedited schemes.)

Amendments made: In page 16, line 6, leave out the words "The Treasury," and insert instead thereof the word "There."

In line 8, leave out the words "advance to the Road Fund," and insert instead thereof the words:
be advanced, subject to the approval of the Treasury, to the Road Fund out of moneys provided by Parliament.

In line 26, leave out from the word "and" to the word "at," in line 27.—(Mr. Pybus.]

Clause 26 (Power to grant compensation allowance to certain collectors of taxes on
determination of appointment) ordered to stand part of the Bill.

CLAUSE 27.—(Stamp duty in respect of audit by district auditors.)

Amendments made: In page 17, line 25, at the beginning, insert the words "Subsection (1) of."

In line 31, at the end, add the words:
Provided that nothing in this Section shall be taken to affect the provisions of Sub-section (2) of the said Section sixty-one.—[Major Elliot.]

CLAUSE 28.—(Construction, short title and extent.)

Amendment made: In page 18, line 4, at the end, insert the words:
(4) In this Act the expression 'the United Kingdom 'does not include the Isle of Man."—[Major Elliot.]

NEW CLAUSE.—(Additional and substituted customs duties on articles made wholly or partly of silk or artificial silk.)

(1) As from the commencement of this Section, in addition to the customs duties chargeable under Section four of and the Second Schedule to the Finance Act, 1925, and Sub-section (1) of Section five of the Finance Act, 1926, a customs duty equal to 10 per cent. of the value of the articles shall be charged on the importation into the United Kingdom of yarns and tissues and other articles (not being articles of apparel) made wholly or partly of silk or artificial silk.

(2) As from the commencement of this Section, in the case of an article of apparel made wholly or partly of silk or artificial silk there shall, in lieu of the customs duty chargeable under the enactments aforesaid, be charged, on the importation thereof into the United Kingdom, whichever is the higher of the two following duties, that is to say—

(a) a customs duty equal to the aggregate amount of the customs duty which would otherwise have been chargeable under the enactments aforesaid, and of a duty equal to 10 per cent. of the value of the article;
(b) a customs duty calculated at the rate shown in the following table on the weight of the article: —

—
In the case of articles containing silk alone or containing both silk and artificial silk.
In the case of articles containing artificial silk alone.



the 1b.
the 1b.



s.
d.
s.
d.


Where the article is made wholly of silk or artificial silk, or where the value of the silk or artificial silk component exceeds twenty per cent. of the aggregate of the values of all the components of the article.
12
0
5
0


Where the value of the silk or artificial silk component exceeds five per cent. but does not exceed twenty per cent. of the aggregate of the values of all the components of the article.
4
0
1
8


Where the value of the silk or artificial silk component does not exceed five per cent. of the aggregate of the values of all the components of the article.
0
9
0
4

(3) The provisions of Part II of the Second Schedule to the Finance Act, 1925 (which
relates to drawbacks), shall not apply in relation to the duties chargeable under this Section, but a drawback equal to the amount of any duty paid under this Section in respect of any articles may be allowed—

(a) if the articles (not being articles specified in paragraph 1 of the said Part II) are shown to the satisfaction of the Commissioners of Customs and Excise to be in such form and state that the rate of duty which would be payable in respect thereof, if they were being imported, would be the same as that at which they or their components have already been charged; or
(b) if the articles are made up articles exported in the form and state in which they are imported.

(4) The provisions of Part III of the said Schedule shall, so far as applicable, apply to, and in relation to, the duties charged and the drawbacks allowed under this Section as they apply to, and in relation to, the duties and drawbacks mentioned in the said Schedule, subject to the following modifications and exceptions: —

(a) paragraphs 1 and 2 of the said Part III shall not apply in relation to any duty which is calculated by reference to value or to any drawback of such a duty;
(b) paragraph 7 shall apply as if there were inserted after the word "if," in the second and third place where that word occurs, the words "or so far as";
(c) paragraphs 10 and 11 shall not apply.

(5) In the case of goods being Empire products within the meaning of Sub-section (1) of Section eight of the Finance Act, 1919, the customs duties imposed by this Section shall be charged at the preferential rate of five-sixths of the full rate.

(6) This Section shall be deemed to have had effect as from the eleventh day of May, nineteen hundred and thirty-two.—[Major Elliot.]

Brought up, and read the First time.

The FINANCIAL SECRETARY to the TREASURY (Major Elliot): I beg to move, "That the Clause be read a Second time."

Major NATHAN: There are two or three features of an unusual character in connection with this Clause to which I wish to direct the attention of the Committee. These duties form no part of the considered financial proposals of the Government for providing the revenue of the year. They were, in fact, introduced as a last moment supplement. They are not duties designed to secure revenue. They are duties which by their operation transform the Silk Duties, which have been revenue duties since 1925, into Protectionist duties. That is their avowed object. The fact that the Chancellor of
the Exchequer was rushed into placing these proposals before the House at the last minute is doubtless the reason why, when it comes to be examined, the evidence upon which the decision was taken is open to serious criticism. It is probably true to say of the Chancellor of the Exchequer, if I have regard to the evidence which has been published, and it is certainly true as to the great majority of the members of the Committee and of the public, that it was thought that the 50 per cent. Abnormal Importations Duty was a duty which fell on the top of the existing duty, and that that was the reason why the Chancellor of the Exchequer felt that he should put fresh proposals before the Committee. Complaints were made that the sudden drop from 50 per cent. under the Abnormal Importations Duties to 20 per cent. under the Import Duties Order was unfair and demoralising to the trade.
The fact is, when the evidence comes to be examined, that neither pure silk piece goods nor artificial silk piece goods were subject to the 50 per cent. tax at all. The 50 per cent. under the Abnormal Importations Duties only applied to piece goods in so far as they contained at least some element of wool or cotton. Both pure silk and artificial silk goods without wool or cotton were free from the 50 per cant. duty. When I say that, I am referring to piece goods. It is true that silk stockings, both real silk and artificial silk, were subject to the duty of 50 per cent. on top of the existing duty of 33⅓ per cent. making a total of 83⅓ per cent. a wholly prohibitive duty, which induced the recommendation of the Import Duties Advisory Committee that the 50 per cent. duty should be withdrawn. It is to be noted that the 50 per cent. duty only applied to silk or artificial silk hosiery and not to underwear. The truth of the matter is that the heavy incidence of the duty upon the hosiery end of the question was exploited to secure exorbitant protection for silk and artificial silk piece goods.
7.0 p.m.
I ask the Committee to appreciate those duties. I have had certain figures got out, but I will only trouble the Committee with two or three. One set of figures relates to real silk georgette and real silk crepe de chine. They are the two articles which form the great staple of the industry, and the duties amount
to 5l½ per cent. and 54 per cent. respectively, including the new 10 per cent. duty reduced to an ad valorem scale. As regards artificial crepe de chine, the duty is no less than 75 per cent. Every hon. Member of the Committee will agree that that is a rate of duty which is exorbitantly high. Consider its effect upon trade, industry and employment in this country. What happens as regards the export trade is that the goods are not brought here as finished goods but in the green state to be printed or dyed and then exported. Although there is a drawback on the preexisting duties and for manufactured articles both in respect of pre-existing duties and the duties about to be imposed, there is no drawback in regard to the additional duties on piece goods. The only result is to force the trade on to the foreigner and impose a large loss on exporters in this country. It means that instead of the dye factories and printing factories being employed in dyeing and printing goods brought here for that purpose, the work will be done abroad. Instead of importing goods, manipulating them and them exporting them, they will be diverted to the foreign manufacturer to be printed and dyed and then sent to the ultimate consumer in the Colonies or on the Continent. A case was brought to my attention to-day in which an order had been placed for £20,000 worth of goods imported into this country to be dyed and printed here and exported abroad. As a result of the additional duty and there being no drawback, though the order has to be fulfilled because it is a contractual obligation, instead of a profit it will show a loss and the British merchant concerned is bound not to undertake further business of that kind, which is definitely going from the country as a result of the duties.
Take the scope and incidence of the duties on hosiery and underwear. The duty in any case would be 43⅓ per cent. —the old 33⅓ per cent. plus 10 per cent., but that is a minimum, and owing to the alternative weight calculation being brought into reckoning, the duties may become as high as 90 per cent. I will give some very remarkable figures as to how these duties actually operate in practice. Take underwear. I am told that pure silk knickers imported at 120s.
per dozen weigh 2 lbs. per dozen. The duty on them amounts to 52s. per dozen or 43⅓ per cent. That is the duty which those comparatively few people who are able to afford pure silk goods of this kind have to pay. Take cotton knickers with a silk stripe, imported at 5s. per dozen. On them the duty is 5s. 10d. per dozen, or 116 per cent. Now take fleecy-lined knickers pleated with artificial silk, which are imported at 10s. per dozen and weigh 5 lbs. per dozen. The duty is charged at 5s. per lb.—25s. per dozen or 250 per cent. Pure silk, which the wealthy members of the community buy, pays a duty of 43⅓ per cent, but on the cheaper goods, which the great masses of the population can only afford, the duty alone is 116 per cent. or even 250 per cent.
As a final instance I take silk stockings with lisle tops and feet, imported at 9s. per dozen, upon which the duty is 8s. 9d. per dozen, or practically 100 per cent. I do not believe that when the Chancellor of the Exchequer acceded to the request made to him by the Silk Association he realised the effect of these duties and how tendencious was the information given by them at all events in regard to piece goods. I urge the Chancellor to reconsider this position in the light of these figures, and I would invite him particularly to make some statement on a matter which is causing the greatest anxiety in trade circles, as to drawbacks on the extra 10 per cent. in respect of artificial and real silk piece goods.

Major ELLIOT: I readily respond to the invitation of my hon. and gallant Friend, and am obliged to him for the clarity and brevity with which he put his case. There are cases of duties which will undoubtedly require serious examination, and cases have been brought to me by Members not merely on those benches but on other benches. That is an indication of how necessary it is that these duties should be reviewed by some body which will be able to carry out a full and impartial investigation, and sift the evidence on one side or the other. The circumstances of urgency arising from the fact that there had been a high duty produced a situation of great difficulty in the trade which we recognised not because of pressure but because of argu-
ments. It is the business of all hon. Members to bring forward arguments just as the hon. and gallant Member for North-East Bethnal Green (Major Nathan) has brought forward arguments on behalf of some of his constituents.
The case of the silk trade was one of great difficulty, and admittedly it had to be met. We met it by an admittedly emergency procedure. The Chancellor's declaration was that the procedure he proposed to adopt was to put up a temporary shelter and under cover of that to have the case reviewed by the Import Duties Advisory Committee in a consultative capacity. The case which the hon. and gallant Member has brought up shows strongly the need for such a review. The only point on which he asked me to make a declaration was on the question of drawbacks. It is not possible to make provision for such drawbacks under the present scheme. The Silk Duties drawbacks were most carefully and meticulously worked out and it was impossible under the emergency position to spatchcock these drawbacks into that scheme. We shall not be able to apply them in the present case. With that explanation, I hope the hon. and gallant Member will find it possible to allow us to carry the case to the expert tribunal and have it inquired into, and then do our best to bring it into the framework of the general scheme.

Sir P. HARRIS: I must thank the right hon. and gallant Gentleman for his very remarkable admission that this is, after all, only an improvised emergency scheme. I might remind him that the original Financial Resolution was passed at midnight and the Report stage was taken at five in the morning. I protested against that procedure at the time, and pointed out that we were making a very serious precedent in introducing a new tax at midnight or in the early morning without adequate discussion. The Clause consists of over 60 lines, and contains very complex and involved proposals which raise a highly technical and controversial matter. In normal times an ordinary House would have discussed it more fully. This kind of procedure can only be justified by emergency or special circumstances. We do not know how the Government had arrived at these particular percentages, on whose report or on what examination, Or whether there has been any examina-
tion by experts, or whether they merely accepted the representations of the interested parties. I am rather inclined to think they have done that. I will not be too severe on the Financial Secretary, because I realise that if you are to have tariffs there is no reason why silk should not have them as much as wool, cotton or other articles. I am glad these proposals are going to the Advisory Committee. I take no exception to that; on the contrary. If we are to have duties of this kind, it is far better that they should go before a properly constituted committee to be examined and the arguments on both sides heard.
It has been pointed out that already various interests have suffered in the export trade because of the arrangements regarding drawbacks. In certain cases, I am assured by people acquainted with the trade, the drawbacks are most unsatisfactory. Take the question of piece goods. These come in from China and Japan, and they change their form and are either dyed or printed, and it is almost impossible to get any drawbacks. These very same goods from China and Japan go to Lyons in France, where they are dyed and printed. There is very severe competition between Lyons and Manchester in this particular trade of dying grey cloths. But, on the whole, Manchester has been doing the better trade owing to the great improvement in printing processes and designing, and the trade in Chinese and Japanese silk is coining to this country. Now, owing to the unsatisfactory arrangements made by drawbacks, a great part of that trade will be lost to Manchester, and will be entirely concentrated in the Lyons area.
Therefore, we must be thankful for small mercies. The Financial Secretary is largely in a white sheet. He admits that this has been forced upon him by circumstances. I hope that when the properly constituted tribunal considers the whole thing these proposals will be reversed or amended and made less injurious to our export trade. In the meantime, I make my protest against this kind of procedure being used to impose new taxes. It was introduced at quarter past twelve midnight, the Report stage was taken at five o'clock in the morning, and now we are told that we must not occupy more than 20 minutes or half an hour because there are many other important
matters to be dealt with. Although there are many hon. Members who would like to give useful contributions, they are persuaded to be silent and to let 60 lines of the Bill go through with inadequate consideration.

Lieut.-Colonel ACLAND-TROYTE: I should like to impress upon the Financial Secretary the importance of urging the Advisory Committee to deal with this matter as quickly as possible, especially the question of drawbacks, because these goods are brought here to be dyed and if we lose that dyeing trade it will be hard to recover it. If a 10 per cent. drawback is granted we shall not lose the trade, but if there is delay we may lose a very important trade.

Mr. LEVY: I should like to say one word to correct the hon. Member for South-West Bethnal Green (Sir P. Harris) on the question of drawbacks. A drawback on silk is an advantage to the export trade; but in so far as that silk comes into this country and duty is paid upon it, it is only right and proper that when it is re-exported the duty should be recovered.

Major NATHAN: That is what does not happen.

Mr. LEVY: That is what exactly does happen. With the exception of the overriding 10 per cent. I hope the hon. and gallant Member will forgive me for being so emphatic, but I would ask him to give me credit for knowing what I am talking about.

Clause added to the Bill.

NEW CLAUSE.—(Reduced rate of Entertainments Duty.)

As from the first day of July, nineteen hundred and thirty-two, entertainments duty within the meaning of the Finance (New Duties) Act, 1916, shall, in Great Britain, be charged at the rate set out in the Fourth Schedule to this Act.—[Mr. T. Williams.]

Brought up, and read the First time.

Mr. T. WILLIAMS: I beg to move, "That the Clause be read a Second time."
This Clause has relation to the new Fourth Schedule on page 1068. The Clause and Schedule deal exclusively
with the cheaper seats in cinemas and other places of entertainment. The right hon. Gentleman will tell us, I suppose, that the Government were obliged to impose this duty because of the need for revenue, but I suggest that the new duty on seats either in cinemas or other places of entertainment where the net charge, exclusive of tax, is less than 6d., is an imposition that ought not to be resorted to even by a National Government. Since 1916 the Entertainments Duty has been revised from time to time. In 1924 all entertainments where the total charge exclusive of tax was less than 6d. were exempt from the payment of Entertainment Duty, but on the 9th November last, in the Supplementary Budget, the Chancellor of the Exchequer reimposed the duty upon seats in cinemas costing from 2½d. to 6d. That blow has fallen with tremendous severity upon proprietors in exclusively working-class districts. An examination of the figures in many of those areas where the people are sorely distressed owing to industrial depression would startle the Financial Secretary or anyone else.
What we have in mind in our Amendment is very largely the fall in attendance and receipts in exclusively working-class areas where the seats range in price from 2d., 4d., 5d. to 6d. Those people who have very small incomes and who live in very indifferent homes, where the home life does not lend itself to enjoyment, periodically take a night off at the picture theatres in order to have some rest for a time from their normal workaday lives. One would scarcely imagine that so small an increase in the price of the seats in the picture halls from 4d. to 5d. would have any material effect, but an examination of the figures of cinemas in my own Division, which are typical of all parts of the country, are startling, and one wonders how many of the proprietors are going to continue to keep their doors open unless there is some response from the Financial Secretary. I am not sure what amount the Financial Secretary expects to derive from the tax on seats below 6d., but I should like to quote a few instances of the effect of the tax upon the attendances and upon the proprietors of the picture halls. The imposition of this duty upon the cheapest seats is depriving the poorest of the poor
of the only opportunity they ever get of a few hours entertainment.
I have particulars with regard to five picture halls in a northern town, where there is a good deal of industrial depression. Whether is is the employed, the partially employed or the unemployed who periodically visit these picture halls makes no difference. Taking the figures for the six months subsequent to the operation of the new duty and comparing them with the same six months in 1931, the figures work out something like this, that the average decrease in net takings varies from 14 to 26 per cent. while the average increase in the duty varies from 113 to 279 per cent. Here is a report of the result of nine weeks takings on the attendance at a picture palace in an exclusively working-class area, a district with a population of about 6,500, where the only opportunity of entertainment the people have, unless they travel a long distance to another town, is to attend their own picture palace. In the nine weeks ending Saturday, 16th May, 1931, compared with the nine weeks ending 14th May, 1932, the figures show that the attendance fell by 44 per cent. and the takings also by 44 per cent., while the slight profit that was made in the previous year has been turned into a loss. In all probability, unless there is a radical change, that picture palace will have to close its doors. We think that that ought not to be the case.
If the Financial Secretary by any means can relieve the consequences of this latest burden, he ought to leave no stone unturned to secure the necessary money elsewhere, so that such relief as can be given will be given in this particular case. Let me give the figures for a period of three months subsequent to the operation of the new duty with regard to seats up to 6d. compared with the corresponding figure for 1930–31. The attendance at this particular picture palace before the operation of the increased duty was 44,204, while in the period subsequent to the operation of the tax the attendance had fallen to 28,742, or a total reduction of 35.2 per cent. The right hon. Gentleman will readily see that, in the first place, the local people resent this duty on the cheaper seats and that, coupled with the distress in the area, the result is serious for these places of entertain-
ment, The secretary of one, who is one of the best social reformers in that part of the South Yorkshire, says:
I estimate that we may lose £132 18s. 3d. for the first 12 weeks following the increase of the tax, compared with a profit of £140 in the corresponding 12 weeks of the previous year, a difference of not less than £273 15s. 3d. in what is the very best part of the year. Unless substantial profits are made between November and the end of January to cancel out the losses in the summer period, many of such picture palaces as this one will have to close.
I could quote from half a dozen other picture halls in the Don Valley Division, which is made up of a series of small districts of from 6,000 to 10,000 people. They all have their own picture halls and this particular tax falls with undue severity on districts of that description. People may be working three days a week and if they want a change perhaps on one day of the week and wish to attend a picture palace, they may conceivably scrape a few coppers together. The extra 1d. may seem very little to Members of this House but it is a substantial sum to them and very often makes the difference between attendance or non-attendance at a place of entertainment. I will quote further particulars of another picture palace in the same area, where the net income for two periods, subsequent to the new duty and prior to the operation of the new duty, has fallen by £494, and a small profit has been transformed into a loss. I need hardly continue to quote figures.
The essential fact is that the Government have imposed duties upon tea and upon beer. They have insisted on cutting unemployment benefit and have left very little for the poor people in the distressed areas to exist upon. This last imposition is the last straw on the camel's back. If picture halls were vile things which ought to be destroyed, then I think the right hon. Gentleman would be doing the right thing in imposing this heavier duty and in closing picture halls in working class areas, but if he regards cinema exhibitions as a healthy entertainment and pastime and one that ought to be encouraged he ought to remove the duty, otherwise tens of thousands of the poorest people will be denied a single attendance at a picture palace even once a week. I ask the right hon. Gentleman, despite the fact that he has already committed him-
self to the national body representing the cinema exhibitors, to see whether he cannot between now and the Report stage, in view of the figures that I have quoted and the figures that he knows exists, consider whether he will receive the revenue he expects from the tax, because of the reduced attendance not only in seats below 6d. but in seats in excess of 6d., owing to the resentment that has been manifested by the people during the past few months.
I hope that the right hon. Gentleman will see the fairness of relieving these picture palaces and their proprietors from their present unfortunate position. These cinema proprietors are in their way real social reformers who have a general desire to help the local population to tide over this very trying period, and I hope that instead of turning them out of business and destroying the results of many years of useful effort the right hon. Gentleman will give them a word of encouragement and a word of hope. If he cannot say definitely now that he will accept the Amendment and the suggested Fourth Schedule, I hope that he will give us some reason to believe that between now and the Report stage the cinema exhibitors in working class areas will be considered with the possibility that this duty on the cheaper seats will be removed.

7.30 p.m.

The FIRST COMMISSIONER of WORKS (Mr. Ormsby-Gore): I regret that I have to give the reply which the Chancellor of the Exchequer himself gave to a question on the 12th May when he said that he had come to the conclusion that it was. impossible for him to reconsider the scale of taxes which were adopted in the special Budget of last autumn, and which came into force on the 9th November last. If the proposal of hon. Members was adopted the estimated loss to the revenue this year would be £1,500,000, and in a full year £2,000,000. That alone would upset the estimated balance of the Budget, and for that reason it is quite impossible to accept it this year. I quite agree that any increase of these taxes is bound to have an effect on the entertainment industry and on those who go to it. That is not denied; but clearly the Government are not in a position to forgo this money until times are better. The history of this matter is that these cheap seats were taxed from 1916 to 1924, when
the tax was taken off, and remained off until last September, when it was restored. Lord Snowden took it off, 'and Lord Snowden put it on again. I regret that in the present financial circumstances the Government cannot meet the wishes of hon. Members in this matter.

Mr. RHYS DAVIES: The right hon. Gentleman the First Commissioner of Works has made a mistake which I want to correct. He has said that Lord Snowden removed the tax and Lord Snowden imposed it. He is wrong. It was Mr. Philip Snowden who removed the tax, and Lord Snowden who imposed it.

Mr. ORMSBY-GORE: The British Constitution has not been so far altered as to enable a Noble Lord to impose taxation in the House of Commons.

Mr. DAVIES: We were both wrong— and we will call it quits. I am sure that a great many people will be very disappointed that the Government are not able to accept this Amendment. I want to disabuse the minds of hon. Members opposite that this is a problem which affects the big London shows. It is a problem which is not the same in all districts. The issue with which we are confronted in the poorer districts differs fundamentally from that in the large towns. We want to abolish all taxes on seats up to 6d., and one would have thought that with a National Government made up of all parties, including some members of the so-called Socialist party, we should get some concession in a matter like this. We are making a plea which would affect in the main places where the seats are hardly ever over 6d. There are small theatres and music halls and entertainment places where the charge for a seat is never more than 6d. I have one or two such places in my own Division, where the price of seats is very low indeed, and I have been supplied with information which proves that quite apart from the depression from which the country is as a whole suffering, that this taxation has had an adverse effect on the takings of these small shows.

The point has been put to me that whilst the gross receipts of these places have been going down the amount of the tax has increased. That is an extraordinary position in relation to taxation of any kind. It must be borne in mind that not all of these places of amusement are run for profit. There are places in the South Wales mining district where places of entertainment are owned by the local community, by the trade unions, and in other districts by co-operative societies. We must get rid of the idea that every one of these places of amusement is run for profit. I want of course to keep within the schedule of time allotted to us. Hon. Members opposite have been more guilty of breaking the arrangement entered into than we on this side. I will conclude therefore by appealing to the Government to accept the Amendment. On an issue like this I think that Members of the Cabinet should be present to listen to the Debate. After all, we are starting with a tax on 2½d.— this is a twopenny halfpenny Government —and we are taxing that sum by another halfpenny. That is really a monstrous thing to do. We are told that the country is in such a terrible predicament that the Government is compelled to take one-halfpenny from every child who goes to a cinema in this country and pays 2½d. for a seat. That is the state of affairs at the moment. I hope the right hon. Gentleman will convey the purport of our appeal to those in authority in the Cabinet. After all, the Cabinet might be united on an issue of this kind. If they have come to the decision to tax children who pay 2½d. for a seat another halfpenny, we might expect to have unanimity in the Cabinet. On the understanding that our plea will go right to the fountain head, to the Lord President of the Council and to the Lord Privy Seal, I hope we shall get some better result from our Amendment.

Question put, "That the Clause be read a Second time."

The Committee divided: Ayes, 42; Noes, 304.

Division No. 201.]
AYES.
[7.40 p.m.


Adams, D. M. (Poplar, South)
Cove, William G.
Grenfell, David Rees (Glamorgan)


Attlee, Clement Richard
Cripps, Sir Stafford
Griffiths, T. (Monmouth, Pontypool)


Bevan, Aneurin (Ebbw Vale)
Daggar, George
Grundy, Thomas W.


Brawn, C. W. E. (Notts., Mansfield)
Davies, Rhys John (Westhoughton)
Hall, F. (York, W. R., Normanton)


Buchanan, George
Duncan, Charles (Derby, Claycross)
Hall, George H. (Merthyr Tydvil)


Cape, Thomas
Edwards, Charles
Hirst, George Henry


Cocks, Frederick Seymour
Greenwood, Rt. Hon. Arthur
Jenkins, Sir William


Jones, Morgan (Caerphilly)
Millar, Sir James Duncan
Wallhead, Richard C.


Lansbury, Rt. Hon. George
Milner, Major James
Williams, David (Swansea, East)


Lawson, John James
Nathan, Major H. L.
Williams, Edward John (Ogmore)


Lunn, William
Parkinson, John Allen
Williams, Dr. John H. (Llanelly)


Macdonald, Gordon (Ince)
Price, Gabriel
Williams, Thomas (York, Don Valley)


McEntee, Valentine L.
Roberts, Aled (Wrexham)



Maclean, Nell (Glasgow, Govan)
Salter, Dr. Alfred
TELLERS FOR THE AYES.—


Maxton, James
Tinker, John Joseph
Mr. Groves and Mr. Duncan




Graham.


NOES.


Acland-Troyte, Lieut.-Colonel
Dlxey, Arthur C. N.
Jamieson, Douglas


Adams, Samuel Vyvyan T. (Leeds, W.)
Donner, P. W.
Janner, Barnett


Albery, Irving James
Doran, Edward
Jesson, Major Thomas E.


Allen, Lt.-Col. J. Sandeman (B'k'nh'd.)
Drewe, Cedric
Joel, Dudley J. Barnato


Applin, Lieut.-Col. Reginald V. K.
Duckworth, George A. V.
Johnston, J. W. (Clackmannan)


Apsley, Lord
Dugdale, Captain Thomas Lionel
Johnstone, Harcourt (S. Shields)


Aske, Sir Robert William
Duggan, Hubert John
Jones, Lewis (Swansea, West)


Astbury, Lieut.-Com. Frederick Wolfe
Duncan, James A. L. (Kensington, N.)
Kerr, Hamilton W.


Atholl, Duchess of
Dunglass, Lord
Kirkpatrick, William M.


Atkinson, Cyril
Eastwood, John Francis
Knatchbull, Captain Hon. M. H. R.


Balley, Eric Alfred George
Edmondson, Major A. J.
Lamb, Sir Joseph Quinton


Baldwin, Rt. Hon. Stanley
Elliot, Major Rt. Hon. Walter E.
Law, Sir Alfred


Baldwin-Webb, Colonel J.
Elliston, Captain George Sampson
Leech, Dr. J. W.


Balfour, George (Hampstead)
Elmiey, Viscount
Lees-Jones, John


Banks, Sir Reginald Mitchell
Emmott, Charles E. G. C.
Lennox-Boyd, A. T.


Barclay-Harvey, C. M.
Erskine, Lord (Weston-super-Mare)
Levy, Thomas


Barton, Capt. Basil Kelsey
Essenhigh, Reginald Clare
Lewis, Oswald


Beauchamp, Sir Brograve Campbell
Evans, Capt. Ernest (Welsh Univ.)
Liddall, Walter S.


Beaumont, Hn. R. E. B. (Portsm'th, C.)
Everard, W. Lindsay
Lister, Rt. Hon. Sir Philip Cunliffe-


Belt, Sir Alfred L.
Falle, Sir Bertram G.
Little, Graham-, Sir Ernest


Benn, Sir Arthur Shirley
Fielden, Edward Brocklehurst
Llewellin, Major John J.


Bird, Ernest Roy (Yorks., Skipton)
Fleming, Edward Lascelles
Lleweliyn-Jones, Frederick


Blaker, Sir Reginald
Foot, Dingle (Dundee)
Lloyd, Geoffrey


Blindell, James
Fox, Sir Gifford
Lock wood, John C. (Hackney, C.)


Boothby, Robert John Graham
Fremantle, Lieut.-Colonel Francis E.
Lovat-Fraser, James Alexander


Borodale, Viscount
Fuller, Captain A. G.
Lumley, Captain Lawrence R.


Bossom, A. C.
Ganzoni, Sir John
Lymington, Viscount


Boulton, W. W.
Gibson, Charles Granville
Lyons, Abraham Montagu


Bowyer, Capt. Sir George E. W.
Gillett, Sir George Masterman
Mabane, William


Braithwaite, J. G. (Hillsborough)
Gilmour, Lt.-Col. Rt. Hon. Sir John
McEwen, Captain J. H. F.


Briant, Frank
Goff, Sir Park
McKie, John Hamilton


Briscoe, Capt- Richard George
Gower, Sir Robert
Maclay, Hon. Joseph Paton


Brocklebank, C. E. R.
Grattan-Doyle, Sir Nicholas
McLean, Major Alan


Brown, Ernest (Leith)
Greaves-Lord, Sir Walter
McLean, Dr. W. H. (Tradeston)


Brown, Brig.-Gen. H. C.(Berks., Newb'y)
Greene, William P. C.
Macmillan, Maurice Harold


Burghley, Lord
Gretton, Colonel Rt. Hon. John
Macquisten, Frederick Alexander


Butt, Sir Alfred
Grimston, R. V.
Magnay, Thomas


Cadogan, Hon. Edward
Gritten, W. G. Howard
Maitland, Adam


Caine, G. R. Hall-
Guinness, Thomas L. E. B.
Mallalieu, Edward Lancelot


Campbell, Edward Taswell (Bromley)
Gunston, Captain D. W.
Manningham-Buller, Lt.-Col. Sir M.


Campbell, Rear-Admiral G. (Burnley)
Guy, J. C. Morrison
Margesson, Capt. Henry David R.


Caporn, Arthur Cecil
Hacking, Rt. Hon. Douglas H.
Martin, Thomas B.


Cassels, James Dale
Hales, Harold K.
Mayhew, Lieut.-Colonel John


Cautley, Sir Henry S.
Hamilton, Sir R. W.(Orkney & Zetl'nd)
Merriman, Sr F. Boyd


Cayzer, Sir Charles (Chester, City)
Hammersley, Samuel S.
Mills, Sir Frederick (Leyton, E.)


Cayzer, Maj. Sir H. R. (Prtsmth., S.)
Hanley, Dennis A.
Mills, Major J. D. (New Forest)


Cazalet, Thelma (Islington, E.)
Hannon, Patrick Joseph Henry
Milne, Charles


Cazalet, Capt. V. A. (Chippenham)
Harbord, Arthur
Mitchell, Harold P.(Br'tf'd & Chisw'k)


Chalmers, John Rutherford
Harris, Sir Percy
Moreing, Adrian C.


Chapman, Col. R.(Houghton-le-Spring)
Hartland, George A.
Morris, Owen Temple (Cardiff, E.)


Chapman, Sir Samuel (Edinburgh, S.)
Harvey, Major S. E. (Devon, Totnes)
Morrison, William Shepherd


Chorlton, Alan Ernest Leofric
Haslam, Sir John (Bolton)
Muirhead, Major A. J.


Christie, James Archibald
Headiam, Lieut.-Col. Cuthbert M.
Munro. Patrick


Clarry, Reginald George
Hellgers, Captain F. F. A.
Nail, Sir Joseph


Clayton, Dr. George C.
Henderson, Sir Vivian L. (Chelmsford)
Nation, Brigadier-General J. J. H.


Cochrane, Commander Hon. A. D.
Heneage, Lieut.-Colonel Arthur P.
North, Captain Edward T.


Colville, John
Hepworth, Joseph
O'Donovan, Dr. William James


Conant, R. J. E.
Hills, Major Rt. Hon. John Waller
Oman, Sir Charles William C.


Cook, Thomas A.
Holdsworth, Herbert
O'Neill, Rt. Hon. Sir Hugh


Cooke, Douglas
Hope, Capt. Arthur O. J. (Aston)
Ormsby-Gore, Rt. Hon. William G. A.


Cranborne, Viscount
Hope, Sydney (Chester, Staiybridge)
Palmer, Francis Noel


Crooke, J. Smedley
Hore-Belisha, Leslie
Pearson, William G.


Crookshank, Capt. H. C. (Gainsb'ro)
Hornby, Frank
Penny, Sir George


Croom-Johnson, R. P.
Horobin, Ian M.
Peters, Dr. Sidney John


Crossley, A. C.
Horsbrugh, Florence
Petherick, M.


Cruddas, Lieut.-Colonel Bernard
Howard, Tom Forrest
Peto, Sir Basil E. (Devon, Barnstaple)


Culverwell, Cyril Tom
Hudson, Capt. A. U. M.(Hackney, N.)
Peto, Geoffrey K.(W'verh'pt'n, Bilst'n)


Davies, Maj. Geo. F. (Somerset, Yeovil)
Hume, Sir George Hopwood
Pickering, Ernest H.


Davison, Sir William Henry
Hunter, Dr. Joseph (Dumfries)
Powell, Lieut.-Col. Evelyn G. H.


Denman, Hon. R. D.
Hunter. Capt. M. J. (Brigg)
Pybus, Percy John


Denville, Alfred
Hurd, Percy A.
Raikes, Henry V. A. M.


Despencer-Robertson, Major J. A. F.
Hurst, Sir Gerald B.
Ramsay, Alexander (W. Bromwich)


Dickie, John P.
Jackson, Sir Henry (Wandsworth, C.)
Ramsay, Capt. A. H. M. (Midlothian)




Ramsden, E.
Simmonds, Oliver Edwin
Thorp, Linton Theodora


Rawson, Sir Cooper
Slater, John
Titchfield, Major the Marquess of


Ray, Sir William
Sinclair, Col. T.(Queen's Unv., Belfast)
Todd, Capt. A. J. K. (B'wick-on-T.)


Rea, Walter Russell
Smiles, Lieut.-Col. Sir Walter D.
Todd, A. L. S. (Kingswinford)


Reed, Arthur C. (Exeter)
Smith, Sir Jonah W. (Barrow-In-F.)
Touche, Gordon Cosmo


Reid, David D. (County Down)
Smith, Louis W. (Sheffield, Hallam)
Train, John


Reid, William Allan (Derby)
Smith, R. W. (Ab'rd'n & Kinc'dine, C.)
Turton, Robert Hugh


Rentoul Sir Gervais S.
Smith-Carington, Neville W.
Wallace, Captain D. E. (Hornsey)


Reynolds, Col. Sir James Philip
Somerville, Annesley A. (Windsor)
Ward, Lt.-Col. Sir A. L. (Hull)


Roberts, Sir Samuel (Ecclesall)
Somerville, D. G. (Willesden, East)
Ward, Irene Mary Bewick (Wallsend)


Robinson, John Roland
Spears, Brigadier-General Edward L.
Ward, Sarah Adelaide (Cannock)


Ropner, Colonel L.
Spencer, Captain Richard A.
Watt, Captain George Steven H.


Rosbotham, S. T.
Spender-Clay, Rt. Hon. Herbert H.
Wayland, Sir William A.


Runge, Norah Cecil
Stanley, Lord (Lancaster, Fylde)
Wells, Sydney Richard


Russell, Albert (Kirkcaldy)
Stanley, Hon. O. F. G. (Westmorland)
Weymouth, Viscount


Russell, Alexander West (Tynemouth)
Stevenson, James
Whiteside, Borras Noel H.


Russell, Hamer Field (Sheffield, B'tside)
Stones, James
Williams, Herbert G. (Croydon, S.)


Russell, Richard John (Eddisbury)
Storey, Samuel
Wills, Wilfrid D.


Rutherford, Sir John Hugo
Stourton, Hon. John J.
Wilson, Clyde T. (West Toxteth)


Salmon, Major Isldore
Strauss, Edward A.
Windsor Clive, Lieut.-Colonel George


Salt, Edward W.
Strickland, Captain W. F.
Wise, Alfred R.


Samuel, Sir Arthur Michael (F'nham)
Sugden, Sir Wilfrid Hart
Withers, Sir John James


Samuel, Samuel (W'dsworth, Putney)
Sutcliffe, Harold
Worthington, Dr. John V.


Sandeman, Sir A. N. Stewart
Tate, Mavis Constance
Wragg, Herbert


Savery, Samuel Servington
Taylor, Vice-Admiral E.A.(P'dd'gt'n, S.)
Young, Rt. Hon. Sir Hilton (S'v'noaks)


Scone, Lord
Templeton, William P.



Selley, Harry R.
Thomas, James P. L. (Hereford)
TELLERS FOR THE NOES —


Shaw, Helen B. (Lanark, Bothwell)
Thomas, Major L. B. (King's Norton)
Commander Southby and Mr.


Shaw, Captain William T. (Forfar)
Thompson, Luke
Shakespeare.


Shepperson, Sir Ernest W.
Thomson, Sir Frederick Charles

NEW CLAUSE.—(Personal allowance.)

Section eighteen of the Finance Act, 1920, as amended by any subsequent enactment, shall have effect as if in Sub-section (1) thereof for the words "one hundred and fifty pounds" there were substituted the words "two hundred and twenty-five pounds," and as if for the words "one hundred pounds" there were substituted "one hundred and thirty-five pounds," and as if in Sub-section (2) thereof for the word "four-fifths," there were substituted the word "five-sixths."—[Mr. Parkinson.]

Brought up, and read the First time.

Mr. PARKINSON: I beg to move, "That the Clause be read a Second time."
I understand, Mr. Chairman, that on this new Clause you are allowing a discussion of all the Income Tax allowances dealt with in the Amendments on the Paper.

The CHAIRMAN: The hon. Member is not quite right there. This Amendment and the following Amendments to some extent involve the same sort of principle, but we cannot properly discuss the other Amendments on this proposed new Clause.

Mr. PARKINSON: I am much obliged. I must have misunderstood what the arrangement was. The new Clause that I am moving raises the question of the personal allowance, which was reduced in September last. We appeal to the Chancellor of the Exchequer to increase the personal allowance by the amount by
which it was reduced in September. I am making my appeal especially for the lower-salaried and higher-waged people whom the September imposition hit most hardly. It will be seen that in the case of married couples I am asking that the allowance be increased from £150 to £225, in the case of a single person from £100 to £135, and that five-sixths be substituted for four-fifths. In his speech in this House in September last the then Chancellor of the Exchequer, Mr. Snowden, said that his proposals would bring within the range of Income Tax payers a large number of persons with incomes rising to £500 who at present pay no Income Tax or a very small tax. We are quite aware that in many cases the contribution to the Exchequer of these new taxpayers is a very small one, but a small contribution from a very limited income means a hardship.
I suppose it was necessary in September last to increase taxation, but we ought to make sure that the imposition is equitable in its application. Of course it is very difficult to say exactly how this tax applies to the whole range of incomes, but at least we expect it to be equitable in its incidence on large and small incomes. I shall limit my remarks to the cases of those with £500 a year or less. It was argued last September that it was necessary to bring within the range of Income Tax many other people, and the Financial Secretary to the Treasury at that time argued that the
charges were equitable. He said that the year was an emergency year and the Government were seeking an emergency solution. According to the statement of some of his colleagues the emergency is greater now than it was in September last. On the other hand, some Members of the Cabinet only a short time ago were saying that we had turned the corner of the financial crisis. Since those words were spoken there have been many changes in the position of the people of the country. There have been large reductions in the salaries of salaried people, and large reductions in the wages of wage-earners. Consequently the hardships imposed last September have become very much greater, and the power of these people to do what they ought to do has been limited to a very large extent.
These hardships have been suffered not only by the people who have had their allowances reduced, but have been suffered by their children. I know that in many cases it has affected the education of the children; the parents have not been able to give their children the education they intended to give them owing to the reduction of the Income Tax allowances, increased taxation, and the reduction in their salaries. Every slight reduction in the income of people who are on the Income Tax margin is a very heavy reduction indeed. Whether it is possible for them to bear any more remains to be seen. In the case of many the burden is too heavy for them to bear, and has brought them very much nearer what might be called respectable poverty, if such a thing is possible. Let me give one or two percentages. In the case of a single person with an earned income of £400 the amount paid in 1931–32 was 60 per cent. over the amount paid in the previous year; for a married couple without children, with £400 earned income, it was 59.2 per cent.; for a married couple with one child it was over 200 per cent. more than in the previous year; and for a married couple with three children, earning £500, it was something like 373 per cent. Of course these percentages sound very large indeed, but they represent the extra amount of money which has had to be paid with the reduced allowances and after the increase in the Income Tax.
I do not know what amount of money is involved in acceptance of the Amendment, but I appeal to the right hon. Gentleman to give back these allowances. The impositions of inequitable taxation bear very hardly on people with a limited income, and any remission of the burden would be a very great relief. You might have the case of a man with a respectable salary, or one of the higher wage-earners, and he may have one or two sons who are uninsured and unemployed. Consequently he has the burden of maintaining these children. I ask the right hon. Gentleman to reconsider the whole question of restoring these allowances and making it possible for parents to do a little more than they are able to do now for their children. But it is not solely for the parents that I am appealing. I know that any tightening in the family life often brings hardship, not for the parents only, but for the children.

8.0 p.m.

Mr. TINKER: I wish to support the proposed new Clause. It will probably be said that the state of the country's finances warrants a call being made upon people with smaller incomes but it is hitting very hard a large number of workers. We have cases in which the Income Tax demand made upon these people is driving them to a very low state. We thought that the inclination would have been towards a higher Income Tax limit than that which has been adopted. It was, with regret, that we found one who had been a Labour Chancellor of the Exchequer reverting to the position taken by a former Tory Chancellor of the Exchequer. We thought that in 1924 when the Labour Chancellor of the Exchequer adopted the method which he did adopt in that year, that we had got away from the old position altogether but we found last year that the same gentleman, though he was not then, as I say, a Labour Chancellor of the Exchequer, had put us hack to the old position which we thought was associated exclusively with the Tory party. That fact may be used as an argument against us to-night.
It may be said that Lord Snowden would not have done this unless it was a necessity, but I put it to the Financial Secretary that the Government in putting on what they have called tariffs, with other indirect charges to follow, have placed on the poorer people of this
country a greater burden than was borne at the time when the Income Tax limit was lower. The poorer people to-day are actually paying a greater rate of taxation indirectly than they were paying at that time. That, I think, is an argument for our case. I have not much hope that our appeal to-night will be listened to by the right hon. and gallant Gentleman but this is one of the cases which we are bound to bring forward in order to show where the heaviest burden is falling and I trust that if the Financial Secretary cannot give way to us now he will in the next Budget give consideration to the case which we arc submitting.

Major ELLIOT: One must recognise the force of the claim so temperately and so powerfully argued by the hon. Member for Wigan (Mr. Parkinson) and the hon. Member for Leigh (Mr. Tinker), but, as they themselves have said, the difficulty is the difficulty of money. Indeed, the hon. Member for Wigan asked me how much money this concession would cost, and I think he will be rather surprised to learn what it would cost to fulfil the demands made in the series of new Clauses on the Paper, taken together, which seek to restore the allowances in force before the second Finance Act of 1931—because such is the purpose not merely of this new Clause but of the other new Clauses which have been put down on this subject. Would the hon. Member be surprised to know that it would cost £19,000,000 this year alone and in a full year £25,500,000? It would be clearly impossible to balance the Budget at all under those conditions. The extent to which these remissions have been made is very surprising. I do not bring this forward as a completely valid point, but hon. Members opposite have not sought in these proposals also to restore the original earned income allowance which was increased by the Finance Act of last autumn from one-sixth to one-fifth to compensate to some extent for the lowering of the other allowances. They do not apparently propose to put that allowance back to where it was, and that would mean that the rate of taxation which is proposed in these new Clauses would actually be lower than the rate which was proposed in April of last year.

Mr. TINKER: We are prepared to make a bargain with the Financial Secretary.

Major ELLIOT: I should be very careful of making bargains of any kind, but a bargain by which I received £5,000,000 and gave £20,000,000 is not one which I could defend here or even in my constituency. No, the prophecy of the hon. Member for Wigan was unfortunately true. I cannot accept the new Clause, and I cannot restore the allowances as they existed before the autumn Budget of last year. But he asks me, and so does the hon. Member for Leigh, to give serious consideration to this point of easing as far as possible the burden on the families in the lower ranges of income. I shall do my best to remember that. It was under the administration of my right hon. Friend the Member for Epping (Mr. Churchill) that most of these allowances were granted. They were granted with the full concurrence and consent of the party to which I belong, and I think it is true to say that in this matter of the remission of a great deal of Income Tax, all parties in the State have honourably done their best to see what can be done to make these burdens fitted to the shoulders which have to bear them.
The Royal Commission on Income Tax of which the late Mr. William Graham was a member pointed out that personal allowances ought to be introduced, but the children's allowances of £50 for the first child and £40 for the others, were, in fact, far more generous even than the Royal Commission's recommendation, which was £36 for the first child and £27 for the others. That shows how relatively recent is the introduction of the system of allowances in our Income Tax system. They practically did not exist at all in the pre-War years. There was no allowance then in respect of a wife and the only recognition of family responsibility was an allowance of £10 for each child. As I say, the Royal Commission recommended an increase of that allowance to £36 for the first child and £27 for the others and that recommendation was founded upon by the right hon. Gentleman the Member for Epping and others in making a considerable increase of the allowances and reliefs in connection with Income Tax in the Lower rangers in-
come which brought the tax down to a matter of pence rather than shillings in the pound.
When I am reproached by the hon. Member for Leigh with having followed a Chancellor of the Exchequer who was not at that time a Labour Chancellor of the Exchequer—so the hon. Member contends—let me ask what that Chancellor of the Exchequer did, when he was admittedly a Labour Chancellor of the Exchequer in 1924 and when he was in command of considerable surpluses? [An HON. MEMBER: "Ancient history!"] It is not so ancient in the history of the country and it is not so very ancient even in the history of Viscount Snowden of Ickornshaw. In those days, with the enthusiastic support of his party, he imposed a tax on a married man with £500 a year earned income and with five children of £9 2s. per annum and in 1931 as continued in 1932 he reduced that tax to £5 per annum.

Mr. TINKER: On the down grade.

Major ELLIOT: It is, but I thought the hon. Member was complaining that it was on the up-grade.

Mr. TINKER: I mean that Viscount Snowden was on the down grade.

Major ELLIOT: If the effect of being on the down grade is a reduction of Income Tax from £9 2s. to £5, long may the down grade continue. I am sure that most people would be willing to agree to an earldom or even a dukedom being conferred on Lord Snowden if every time that we gave him a step in the peerage it halved the Income Tax. In fact, there would be a special extension of the peerage to provide him with further advancement. The fact remains, however, that the personal allowances represent a part of our Income Tax system which has been highly prized both by Chancellors of the Exchequer and by the people in the lower ranges of income who have enjoyed those privileges. As I say, those privileges were increased in recent years and have since to our great regret had to be reduced; that even with the reduction the allowances in many cases are still more generous than they were in 1924, and, lastly, that it would cost £19,000,000 this year and £25,500,000 next year to restore them, and, taking all these circumstances into account, I am sure that my hon.
Friends will not think it unduly harsh of me if I say that it is not possible to accept these new Clauses.

Sir S. CRIPPS: I do not say that we are unduly disappointed, because we did not expect very much from the right hon. and gallant Gentleman, but I should like to point out to the Committee or those Members of it who are here, that this question of personal allowances is worth examination, in view of the history of the taxation of this country since last autumn. In the autumn owing to an emergency, in regard to which equality of sacrifice was heavily emphasised in certain quarters, reductions were made in the Income Tax allowances for both single and married persons, and the right hon. and gallant Gentleman has reminded us that by that means some £25,000,000 was brought into the Exchequer for a full year.

Major ELLIOT: No, I pointed out that this whole series of new Clause represented proposals which would cost £25,000,000 in a full year, but I also pointed out that they would involve actually a lower rate of Income Tax than that which was prevailing at the time of the last Budget and lower than that prevailing in the Budget in which the hon. and learned Member co-operated last April.

Sir S. CRIPPS: I appreciate the distinction and that with the change of the one-fifth earned income allowance back to one-sixth there would not be so much as £25,000,000, but I think I may take it that it would certainly be a figure of somewhere near £15,000,000 as regards these allowances alone. That is the extra charge which has been put upon the lower-paid salary earners and the lower-paid wage earners. At the present time, the single man earning 38s. or 39s. a week comes just on the border of the Income Tax limit, and there is another aspect of this question which makes it particularly hard for that type of single man. Nowadays, under the means test, in many cases the single man earning, say, 39s. to 45s. a week, is compelled to support some other member of his family. If he were married, he would get an allowance under the Income Tax law for supporting his wife and children,
but if the public assistance committee in fact compel him, through the means test, to support someone living in the house with him-a brother, a sister, an uncle, or an aunt-he gets no allowance at all on his Income Tax payments, and that is one reason why we think that this personal allowance ought to be put back again to the old standard. There are many cases now throughout the country, when the standard is so low as £100, of persons who are genuinely suffering by reason of the operation of the means test and the charge which that in fact puts upon them to support other members of their family, a charge which they cannot take into account for dependents or any other way. It is a charge, nevertheless, which is very effectively placed upon them by withdrawing support from the other people living in their household, and in fact they have to make a contribution towards the support of those other persons.
But that is not the only thing that has happened. Since the emergency Budget an enormous sum is now being raised by indirect taxation, for the first time in recent years, by a general charge of Import Duties upon the whole mass of commodities, which are used very largely by the very persons who are suffering this extra imposition of Income Tax. So you have these combined circumstances, so far as the sacrifice of these individuals is concerned, that in nearly all cases, like the teachers, the civil servants, and the police, they have had reductions of their

salaries, and they have had to pay this new Income Tax in the year in which the reduction of salary has taken place; and now you have the imposition upon them very largely of the indirect taxation. Tie right hon. and gallant Gentleman frowns, but he knows as well as I do that in fact the burden of that indirect taxation proportionately is borne much more by those who have less to spend than by those who have more.

It does not matter to him or to me if the price of everyday commodities goes up. We do not really feel it. We may be disappointed that, say, tea costs 2d. or 3d. per lb. more, but it is not anything very vital. But to many of these people it is something that is very vital indeed. It is a real extra burden on them; and you have had all this added incidence falling on the same class, a class which at no time has had those broad shoulders which the right hon. and gallant Gentleman likes to see in the taxpayer who is going to give a large contribution to the Exchequer. They are people who do not have broad shoulders, who cannot bear heavy burdens. We believe that it is going to be shown that the burden that is now being imposed upon them by the system of taxation upon which the Government are embarking will be proved to be so heavy that we hope they will have the energy to throw it off.

Question put, "That the Clause be read a Second time."

The Committee divided: Ayes, 40; Noes, 299.

Division No. 202.]
AYES.
[8.20 p.m.


Adams, D. M. (Poplar, South)
Greenwood, Rt. Hon. Arthur
Maxton, James


Attlee, Clement Richard
Grenfell, David Rees (Glamorgan)
Milner, Major James


Batey, Joseph
Griffiths, T. (Monmouth, Pontypool)
Parkinson, John Allen


Bevan, Aneurin (Ebbw Vale)
Grundy, Thomas W.
Price, Gabriel


Brown, C. W. E. (Notts., Mansfield)
Hall, F. (York, W.R., Normanton)
Salter, Dr. Alfred


Buchanan, George
Hall, George H. (Merthyr Tydvil)
Tinker, John Joseph


Cape, Thomas
Hirst, George Henry
Williams, David (Swansea, East)


Cocks, Frederick Seymour
Jenkins, Sir William
Williams, Edward John (Ogmore)


Cove, William G.
Jones, Morgan (Caerphilly)
Williams, Dr. John H. (Llanelly)


Cripps, Sir Stafford
Lansbury, Rt. Hon. George
Williams, Thomas (York, Don Valley)


Daggar, George
Lawson, John James



Davies, Rhys John (Westhoughton)
Logan, David Gilbert
TELLERS FOR THE AYES—


Duncan, Charles (Derby, Claycross)
Lunn, William
Mr. Gordon Macdonald and


Edwards, Charles
McEntee, Valentine L.
Mr. Groves.


Graham, D. M. (Lanark, Hamilton)
Maclean, Nell (Glasgow, Govan)



NOES.


Acland-Troyte, Lieut.-Colonel
Atkinson, Cyril
Beauchamp, Sir Brograve Campbell


Adams, Samuel Vyvyan T. (Leeds, W.)
Balley, Eric Alfred George
Beaumont, Hon. R.E.B. (Portsm'th, C.)


Agnew, Lieut.-Com. P. G.
Baillie, Sir Adrian W. M.
Belt, Sir Alfred L.


Allen, Lt.-Col. J. Sandeman (B'k'nh'd.)
Baldwin, Rt. Hon. Stanley
Benn, Sir Arthur Shirley


Applin, Lieut.-Col. Reginald V. K.
Baldwin-Webb, Colonel J.
Bird, Ernest Roy (Yorks., Skipton)


Apsley, Lord
Balfour, Capt. Harold (I. of Thanet)
Blindell, James


Aske, Sir Robert William
Banks, Sir Reginald Mitchell
Borodale, Viscount


Astbury, Lieut.-Com. Frederick Wolfe
Barclay-Harvey, C. M.
Bossom, A. C.


Atholl, Duchess of
Barton, Capt. Basil Kelsey
Boulton, W. W.


Bowyer, Capt. Sir George E. W.
Hannon, Patrick Joseph Henry
Palmer, Francis Noel


Boyce, H. Leslie
Harbord, Arthur
Patrick, Colin M.


Braithwaite, J. G. (Hillsborough)
Hartland, George A.
Pearson, William G.


Briant, Frank
Harvey, Major S. E. (Devon, Totnes)
Penny, Sir George


Briscoe, Capt. Richard George
Haslam, Sir John (Bolton)
Peters, Dr. Sidney John


Brocklebank, C. E. R.
Headlam, Lieut.-Col. Cuthbert M.
Petherick, M.


Brown, Ernest (Leith)
Heligers, Captain F. F. A.
Peto, Sir Basil E. (Devon, Barnstaple)


Burghley, Lord
Henderson, Sir Vivian L. (Cheimsf'd)
Peto, Geoffrey K.W'verh'pt'n, Bllat'n)


Burgin, Dr. Edward Leslie
Hepworth, Joseph
Pickering, Ernest H.


Burnett, John George
Hills, Major Rt. Hon. John Waller
Potter, John


Burton, Colonel Henry Walter
Holdsworth, Herbert
Powell. Lieut.-Col. Evelyn G. H.


Butt, Sir Alfred
Hope Capt. Arthur O. J. (Aston)
Preston, Sir Walter Rueben


Cadogan, Hon. Edward
Hope, Sydney (Chester, Staiybridge)
Procter, Major Henry Adam


Caine, G. H. Hall-
Hornby, Frank
Pybus, Percy John


Campbell, Edward Taswell (Bromley)
Horobin, Ian M.
Raikes, Henry V. A. M.


Campbell, Rear-Adml. G. (Burnley)
Horsbrugh, Florence
Ramsay, Capt. A. H. M. (Midlothian)


Caporn, Arthur Cecil
Howard, Tom Forrest
Ramsden, E.


Cayzer, Maj. Sir H. R. (Prtsmth., S.)
Hudson, Capt. A. U. M.(Hackney, N.)
Ratcliffe, Arthur


Cazalet, Thelma (Islington, E.)
Hume, Sir George Hopwood
Rawson, Sir Cooper


Cazalet, Capt. V. A. (Chippenham)
Hunter, Dr. Joseph (Dumfries)
Ray, Sir William


Chalmers, John Rutherford
Hunter, Capt. M. J. (Brigg)
Rea, Walter Russell


Chapman, Col. R.(Houghton-le-Spring)
Hurd, Percy A.
Reed, Arthur C. (Exeter)


Chapman, Sir Samuel (Edinburgh, S.)
Hurst, Sir Gerald B.
Reid, David D. (County Down)


Chorlton, Alan Ernest Leofric
Jackson, Sir Henry (Wandsworth, C.)
Reid, William Allan (Derby)


Christle, James Archibald
James, Wing-Com. A. W. H.
Remer, John R.


Clarry, Reginald George
Jamieson, Douglas
Rentoul, Sir Gervais S.


Clayton, Dr. George C.
Janner, Barnett
Renwick, Major Gustav A.


Cochrane, Commander Hon. A. D.
Jennings, Roland
Reynolds, Col. Sir James Philip


Colville, John
Jesson, Major Thomas E.
Rhys, Hon. Charies Arthur U.


Conant, R. J. E.
Johnston, J. W. (Clackmannan)
Roberts, Aled (Wrexham)


Cook, Thomas A.
Jones, Lewis (Swansea, West)
Roberts, Sir Samuel (Ecclesall)


Cooke, Douglas
Kerr, Hamilton W.
Robinson, John Roland


Courthope, Colonel Sir George L.
Kirkpatrick, William M.
Ropner, Colonel L.


Cowan, D. M.
Knatchbull, Captain Hon. M. H. H.
Rosbotham, S. T.


Cranborne, Viscount
Knebworth, Viscount
Runge, Norah Cecil


Craven-Ellis, William
Lamb, Sir Joseph Quinton
Russell, Albert (Kirkcaldy)


Crooke, J. Smedley
Latham, Sir Herbert Paul
Russell, Alexander West (Tynemouth)


Crookshank, Capt. H. C. (Gainsb'ro)
Law, Sir Alfred
Russell, Hamer Field (Sheffield, B'tside)


Croom-Johnson, R. P.
Leech, Dr. J. W.
Russell, Richard John (Eddisbury)


Crossley, A. C.
Lees-Jones, John
Rutherford, Sir John Hugo


Cruddas, Lieut.-Colonel Bernard
Lennox-Boyd, A. T.
Salmon, Major Isidore


Culverwell, Cyril Tom
Levy, Thomas
Salt, Edward W.


Davies, Maj. Geo. F.(Somerset, Yeovil)
Lewis, Oswald
Samuel, Sir Arthur Michael (F'nham)


Denman, Hon. R. D.
Liddall, Walter S.
Samuel, Samuel (W'dsworth, Putney)


Despencer-Robertson, Major J. A. F.
Lindsay, Noel Ker
Savory, Samuel Servington


Dickie, John P.
Lister, Rt. Hon. Sir Philip Cunliffe-
Scone, Lord


Dixey, Arthur C. N.
Little, Graham-, Sir Ernest
Selley, Harry R.


Donner, P. W.
Llewellin, Major John J.
Shakespeare, Geoffrey H.


Drewe, Cedric
Llewellyn-Jones, Frederick
Shaw, Helen a. (Lanark, Bothwell)


Duggan, Hubert John
Lovat-Fraser, James Alexander
Shaw, Captain William T. (Forfar)


Duncan, James A. L. (Kensington, M.)
Lumley, Captain Lawrence R.
Shepperson, Sir Ernest W.


Dunglass, Lord
Lyons, Abraham Montagu
Slater, John


Eden, Robert; Anthony
Macdonald, Capt. P. D. (I. of W.)
Smiles, Lieut.-Col. Sir Walter D.


Elliot, Major Rt. Hon. Walter E.
McKie, John Hamilton
Smith, Louis W. (Sheffield, Hallam)


Elliston, Captain George Sampson
Maclay, Hon. Joseph Paton
Smith, R. W. (Aberd'n & Kinc'dine, C.)


Elmley, Viscount
McLean, Major Alan
Smith-Carington, Neville W.


Emmott, Charles E. G. C.
McLean, Dr. W. H. (Tradeston)
Somerville, Annesley A. (Windsor)


Entwistle, Cyril Fullard
Macmillan, Maurice Harold
Somerville, D. G. (Willesden, East)


Erskine, Lord (Weston-super-Mare)
Macquisten, Frederick Alexander
Spears, Brigadier-General Edward L.


Essenhigh, Reginald Clare
Magnay, Thomas
Spencer, Captain Richard A.


Evans, Capt. Ernest (Welsh Univ.)
Maitland, Adam
Spender-Clay, Rt. Hon. Herbert H.


Everard, W. Lindsay
Mallalieu, Edward Lancelot
Stanley, Lord (Lancaster, Fylde)


Fleming, Edward Lascelies
Manningham-Buller, Lt.-Col. Sir M.
Stanley, Hon. O. F. G. (Westmorland)


Foot, Dingle (Dundee)
Margesson, Capt. Henry David R.
Stevenson, James


Ford, Sir Patrick J.
Martin, Thomas B.
Stones, James


Fox, Sir Gifford
Mayhew, Lieut.-Colonel John
Storey, Samuel


Fuller, Captain A. G.
Merriman, Sr. F. Boyd
Stourton, Hon. John J.


Ganzoni, Sir John
Millar, Sir James Duncan
Strauss, Edward A.


Gibson, Charles Granville
Mills, Sir Frederick (Leyton, E.)
Strickland, Captain W. F.


Gillett, Sir George Masterman
Mills, Major J. D. (New Forest)
Stuart, Hon. J. (Moray and Nairn)


Glyn, Major Ralph G. C.
Milne, Charles
Sugden, Sir Wilfrid Hart


Golf, Sir Park
Milne, John Sydney Wardlaw-
Sutcliffe, Harold


Gower, Sir Robert
Mitchell, Harold P.(Br'tt'd & Chisw'k)
Tate, Mavis Constance


Grattan-Doyle, Sir Nicholas
Morris, John Patrick (Salford, N.)
Taylor, Vice-Admiral E. A.(P'dd'gt'n, S.)


Greaves-Lord, Sir Walter
Morris, Owen Temple (Cardiff, E.)
Templeton, William P.


Greene, William P. C.
Morrison, William Shepherd
Thomas, James P. L. (Hereford)


Gretton, Colonel Rt. Hon. John
Muirhead, Major A. J.
Thomas, Major L. B. (King's Norton)


Griffith, F. Kingsley (Middlesbro', W.)
Munro, Patrick
Thompson, Luke


Grimston, R. V.
Nail, Sir Joseph
Thomson, Sir Frederick Charles


Gritten, W. G. Howard
Nathan, Major H. L.
Thorp, Linton Theodore


Guinness, Thomas L. E. B.
Nation, Brigadier-General J. J. H.
Titchfield, Major the Marquess of


Gunston, Captain D. W.
O'Donovan, Dr. William James
Todd, Capt A. J. K. (B'wickon-T.)


Guy, J. C. Morrison
Oman, Sir Charles William C.
Touche, Gordon Cosmo


Hales, Harold K.
O'Neill, Rt. Hon. Sir Hugh
Train, John


Hanley, Dennis A.
Ormsby-Gore, Rt. Hon. William G. A.
Turton, Robert Hugh




Wallace, Captain D. E. (Hornsey)
Weymouth, Viscount
Withers, Sir John James


Ward, Lt.-Col. Sir A. L. (Hull)
Whiteside, Borras Noel H.
Wood, Sir Murdoch Mekenzie (Banff)


Ward, Irene Mary Bewick (Wallsend)
Williams, Herbert G. (Croydon, S.)
Worthington, Dr. John V.


Ward, Sarah Adelaide (Cannock)
Wills, Wilfrid D.
Wragg, Herbert


Watt, Captain George Steven H.
Wilson, Clyde T. (West Toxteth)



Wayland, Sir William A.
Windsor-Clive, Lieut.-Colonel George
TELLERS FOR THE NOES.—


Wells, Sydney Richard
Wise, Alfred R.
Sir Victor Warrender and




Commander Southby.

NEW CLAUSE.—(Rate of estate duty where rebate includes insurance moneys.)

Where the estate of a deceased person includes moneys paid on his death under a policy of insurance upon his life, the percentage rate of the estate duty payable in respect of the whole estate shall be the rate which would have been chargeable if the value of the estate were reduced by an amount equal to so much of those insurance moneys as is applied in the payment of death duties.—[Sir J. Reynolds.]

Brought up, and read the First time.

Lieut.-Colonel Sir JAMES REYNOLDS: I beg to move, "That the Clause be read a Second time."
The proposed new Clause is to ensure that insurances taken out to pay Death Duties shall, as they are available for those duties—

Mr. LANSBURY: On a point of Order. As so many Amendments have been passed over, may I ask which Amendment is being moved now?

The DEPUTY-CHAIRMAN: I have much pleasure in informing the right hon. Gentleman. We are dealing with the proposed new Clause in the name of the hon. and gallant Member for the Exchange Division of Liverpool (Sir J. Reynolds) dealing with the rate of Estate Duty.

Sir J. REYNOLDS: The purpose of my proposal is that insurance taken out to pay Death Duties, in being available for those duties, shall in no case cause those duties to be raised to a higher category. Everyone realises the terrible depression of estates through Death Duties, and it must be readily evident that, if people are to preserve estates, insurance is vital and necessary. It may come about, as things stand at present, that, while an insurance is taken out for the very purpose of paying the Death Duties which the individual expects that his estate will have to pay, that insurance may actually raise the estate to another category, and not only will the insurance be lost, but a further loss may fall upon the estate. This militates against taking out an insurance, and eventually it will create a desire on the part of those having
capital to leave to give their capital away rather than let the estate face the very heavy duties that will fall upon it at death. It may happen, in fact, that a man who has an estate of between, say, £400,000 and £500,000, has an insurance policy of £10,000. If by chance the estate is £495,000, the policy raises it to £505,000, and 2 per cent. extra duty is incurred, so that the £10,000 insurance is lost. If you take another category, that of an estate of £600,000, not only will the £10,000 insurance be lost, but a further £2,000 will have to be paid. A millionaire with an insurance of £100,000 may lose the whole of it if his estate gets into the category of £2,000,000. That is inequitable, and it militates against insurance which is the only prudent way of dealing with Death Duties.

8.30 p.m.

Major ELLIOT: After the remarkably rapid progress which the Committee has made in the last few minutes, it would be ungracious if I were to allow this proposed new Clause to pass without a word of discussion. The Committee was primed for lengthy discussions which, owing to the absence of the Movers of certain Amendments, has been baulked. The proposals of the hon. and gallant Member are proposals which I should have wished to consider a little move deeply than I have been able to do. The difficulty in all these insurance propositions which are brought before us is that they cost the revenue an enormous sum either immediately or later on, and that under present conditions we cannot afford it. The hon. Gentleman gave an example during his speech. Let us take an estate of £1,050,000, and including a good proportion of insurance money, as I am sure such an estate normally would do. Estate duty is payable on that amount at the rate of 40 per cent., and the amount of duty would reach £420,000. If the insurance money, which might amount to £300,000, were applied in payment of the duty, then under the present proposals that estate would be charged not at the rate of 40 per cent., which is applicable to an estate of £1,050,000, but at the rate
applicable to an estate of £750,000— £1,050,000 less £300,000. That would come out at 36 per cent., and the duty would be £378,000, a loss of duty to the State amounting to £42,000.
It may be that my hon. Friend will say that a levy of £378,000 is quite sufficiently large for the community to take out of any man's estate, and that insurance is an advantage both to the individual and to the community while he lives and to the State after his death. But the fundamental fact in regard to direct taxation is this, that the proper way to reduce the burden is not to invent new ways of getting round taxes but to lower the level of the taxes. That is the only fundamental way in which relief can be brought. At first sight one is attracted by such special schemes and procedure. It is said that under this system of insurance a large sum of money is readily available for the State at death, that there is not a disturbance of the market caused by the throwing of great blocks of shares upon it, and there is not a disturbance to the individuals concerned, and a disturbance, it may be, of enterprises in which such individuals are engaged. But all those difficulties are due to the high level of taxation. If every estate of that sort were to fall by a proportionate amount, all that would happen would be that the rate of the tax would have to be put up, and the second state of the taxpayers would be no better than the first, and in addition people would feel that indignation which we all feel when, having put through what we consider a successful method of eluding some disagreeable duty, we find that that disagreeable duty, after having been pushed out of the window, is knocking at the door and insisting on coming in.
I would ask my hon. Friends on the Opposition side to consider these points as well. These great levies are producing serious disturbance in the affairs not merely of private individuals but of the businesses upon which both we and they depend for our livelihood. When economy is spoken of they only see it, quite naturally, in the repulsive and grim aspect of a lesser sum available for the people in whom they are most immediately interested, or in the way of a greater burden upon those whose interests they desire to promote, but if we do not have economy it will be impossible to
reduce the level of taxation, and those great levies will begin to defeat their own ends by producing schemes such as this scheme, whereby people, if they cannot by fair means get a remission of taxation, will seek to get it—not by foul means, but at any rate by means which sail a great deal nearer the wind than any of us care for. If we make the most remunerative action a man can engage in the task of getting round the Commissioners of Inland Revenue we shall find that we are turning a great many people into that particular occupation who otherwise would be out to earn an honest living for themselves and to give employment to other people. We have to refuse this proposal, firstly, because no limit whatever is placed on the operation. The greater the amount of the policy the more the relief would be. This Clause would be capable of giving complete exemption in the extreme case of an estate consisting wholly of policy money. But leaving that case of special pleading out, I found myself on the broad general point that we are not so anxious to find special ways of escaping crushing burdens of taxation in particular cases as of escaping it in general. We must bend the whole of our efforts to reducing the general rate of taxation, and not a particular rate of taxation; and on that ground, and not on the special point which, as I have shown, makes the operation of this Clause wholly unacceptable, I must refuse to accept the Clause.

Mr. CROOM-JOHNSON: Holding the views which some of us have as to the possibility of the national revenue reaching the sums required by April next, I must confess that the answer which has been given so often to the Committee, "We cannot afford it," is a complete and satisfactory answer to me; but a great many of us hope that this particular subject may be considered when an opportunity arises, when it looks as if we were going to have happier times. I intervene to express the view, so that it may be recorded, that from the point of view of estates which consist mainly of land, and particularly agricultural land, there may be something in this proposal which is worthy of examination when those times come. I would like to make one practical suggestion—that if at any future time we give this relief it should be done
in a way to make it perfectly secure that the policy moneys are in some way implemented for the benefit of the Exchequer, so that the Exchequer may be in a position to say, "Now, upon that event, we can come down upon the policy moneys, and get our duties straight away." I am well aware that considerable relief is already given to agricultural estates in the matter of the estate duty, by the operation of the arrangement by which such duty is payable by instalments spread over, I think, eight years. This proposal might in the end redound to the benefit of the Exchequer, if it could be provided that the policy moneys were to be applied to the Exchequer, so that when the estate fell in the Exchequer could say, "We will take these policy moneys at once," instead of having to wait for payment by instalments. I am sure those of us who have been examining this question are very much obliged to the Financial Secretary for the way in which he has dealt with this matter.

Sir J. REYNOLDS: I beg to ask leave to withdraw my Motion.

Motion and Clause, by leave, withdrawn.

NEW CLAUSE.—(Amendment of s. 45 (1) of Finance Act, 1927.)

Section forty-five, Sub-section (1), of the Finance Act, 1927, shall be amended by the addition of the following Sub-section: —
Rule 1 of the Rules applicable to Schedule E shall be amended to provide that where any person shall in any year continue in office without remuneration the assessment shall be withheld until such person shall again receive a salary, fee, wages, perquisites, or profits in respect of such office or employment.—[Sir A. M. Samuel.]

Brought up, and read the First time.

Sir ARTHUR MICHAEL SAMUEL: I beg to move, "That the Clause be read a Second time."
Under Section 45, Sub-section (1) of the Finance Act, 1927, it is provided that:
Subject to the provisions of this Section Rule 1 of the Rules applicable to Schedule E shall be construed as if for the words 'for the years of assessment' there were substituted the words 'and shall be computed on the amount of all such salaries, fees, wages, perquisites or profits whatsoever therefrom for the year preceding the year of assessment'.
At this point my Clause adds the following words:
but where any person shall in any year continue in office without remuneration the assessment shall be withheld until such person shall again receive a salary, fee, wages, perquisites, or profits in respect of such office or employment,
and then the Section will continue as in the Finance Act, 1927. This Clause is intended to deal with the hardship of directors having to pay four years' Income Tax for three years' remuneration which means, in other words, paying tax for the year when nothing was received from the office or employment. Under the 1927 Act there was a change in the basis of assessment, and from that date the assessment was on the income of the previous year. It was a new system of assessment, and special provision was made for the year in which employment ceases. No provision, however, was made for a director continuing work without remuneration. Thus such a man is taxed for the first year in which he receives no remuneration on the amount he received the previous year. The result is that in some cases a man actually pays tax for four years' assessment, although he has only received three years' pay, and surely the House of Commons never meant that, and it cannot be right. Last December it was stated in the House that it all depended on the system under which the reduction of salary was made. If the reduction took the form of a new contract, then the taxpayer would not pay for four years when he had received only three years' pay. Few people knew of this, and did not arrange to meet that technicality, and they merely continued their work without salary, and are now being taxed on one year's salary more than they have received. That position is unjust, and was probably unforeseen, and not desired by the Revenue. My new Clause is intended to put that matter right.

Mr. ATKINSON: Suppose that the remuneration is renewed next year, I understand that Income Tax would not be paid because the income of this year would decide what has to be paid when no salary has been received. Surely, the taxpayer would get his money back next year, because he would not have to pay, not having received a salary.

Sir A. M. SAMUEL: Suppose that he does not go on next year? I want to
protect the man who has worked for four years and has only received three years' salary. I want to protect the man who has to pay for four years, but who has only received income for three years.

Major ELLIOT: It is true that my hon. Friend the Member for Farnham (Sir A. M. Samuel) has put his finger on a point about which there is a certain difficulty. That difficulty is not confined to the directors of companies, but it is one connected with the method of assessment of Income Tax. The change over to the preceding year system involved a great many alterations in the law and practice which prevailed in previous years. The hon. Member for Farnham has brought forward a, case in which a director has not continued to draw his salary.

Sir A. M. SAMUEL: It is the case of a director who continues his employment but does not take his fees, and I am asking that he should not be charged Income Tax for that year.

Major ELLIOT: The hon. Gentleman means that a director remains in office, although he is not drawing any emolument. The essential point is that if the director alluded to again begins to draw his fees he will be all square, because he will not be charged any Income Tax for that year. Therefore, in what, let us hope is the majority of cases, in which the effort is successful and the business becomes prosperous again, the man who has not drawn his fees or emoluments for one year will once more draw directors fees. In that case he will be charged nothing for that year, and, consequently, will be all square as regards the Inland Revenue. If, however, he never goes on —if his business never again makes any profit and he is never again able to draw any emoluments from it—in that case in what way is he worse off than the trader who makes no profits during the last two or three years of his business? Indeed, the position of the trader is worse, because he is usually drawing the whole of his upkeep from his business, and that is much less frequently the case with a director.
The general trend of remuneration has been downwards, and the taxpayer is at present losing on the preceding-year basis, but that is due to the change in the law whereby the Income Tax was simplified. Everybody is suffering from
that cause just now. If we make this concession for the Schedule E assessments, how can we refuse a similar concession to all the taxpayers who are assessed under Schedule D? The fact that the preceding-year basis sometimes operates in favour of the Exchequer seems to me to afford no adequate ground for departing from it. [Interruption.] The contention of my hon. Friend is that in certain cases a man may be taxed on money that he has not received; but if he subsequently receives the income, he will escape tax upon it for that year, and so he will be all square; while if he never again receives the income I do not see how we could make a concession in that particular case which would not also in some way or other have to be applied to the small trader whose business went out of existence or who lost his whole profits for two or three years. It seems to me, therefore, that very regretfully I must refuse the proposed new Clause.

Sir A. M. SAMUEL: I must, of course, bow to the decision of my right hon. and gallant Friend, but it seems to me that what we are being told is that an injustice must continue because we cannot devise means for doing away with it. I would ask my right hon. and gallant Friend to look into this matter between now and the next Finance Bill, and see if it is possible to make some concession to Schedule E taxpayers in this connection. If they are penalised by having to pay four years' tax instead of three, the worm will turn at last, and they will say that they are not going to work if they are taxed in this way.

9.0 p.m.

Mr. LOUIS SMITH: While I strongly support the plea which has been put forward by my hon. Friend, I should like to ask the Financial Secretary whether it is not the fact that if a director, having received during, say, the last three years a certain salary, voluntarily gives up a portion of that salary—say 10 per cent.—an arrangement is made under Schedule E for him to be assessed on the lower amount? If that be so, is it not equitable that, should he receive no salary at all, be should not be taxed when he has nothing with which to pay the tax? While I accept what my right hon. and gallant Friend has said, I think it is only fair that some alteration should be made to meet such cases.

Mr. ATKINSON: Is it not the case that a director does not pay at all during his first year of office, being taxed on the income of the previous year when he was not earning director's fees? In that case he only pays tax for the same number of years for which he has had the money. He does not pay in the first year; in the second year he pays on his first year's salary, in the third year on his second year's salary, and so on so that really he only pays Income Tax on the same number of payments of salary that he has received.

Sir A. M. SAMUEL: I do not wish to be misunderstood. These people are willing to pay three years' tax on three years' salaries. The observations which my bon and learned Friend the Member for Altrincham (Mr. Atkinson) has just made would presuppose that one year has been left out, but I am not arguing on those lines. If one year is left out, there is no grievance, but undoubtedly in some cases the type of person whom I am trying to protect is called upon to pay on four years' assessments when he has only received three years' income, and in that case he has a grievance.

Sir JOSEPH NALL: The view put forward by the hon. and learned Member for Altrincham (Mr. Atkinson) would be correct in the case of a director appointed after 1927, but it is not correct in the case of one who was in office before that year. I have been informed of a number of cases in which this double collection does apply, and in which it is a fact that tax has been collected for a period one year longer than that for which fees have been received. I would ask the Financial Secretary whether it is strictly accurate to say that a trader may in similar circumstances have to pay tax for one year more than the number of years for which his business has been running? I rather gather that, if a business exists for, say, five years, and thereafter is wound up, or is unable to show any profit in the sixth year, tax is hot paid in respect of the sixth year, seeing that a profit has only been made in five years. At any rate, a grave injustice undoubtedly occurs in certain cases. The whole idea of Income Tax is to collect tax in respect of something which has been received, and to ask a man to pay tax for a year in which he has not received any income at
all from the source to which this particular provision applies is wholly unjust. It ought not to be beyond the wit of the Treasury to devise some wording whereby a man would be relieved of the burden of assessment for a year in which in fact he receives nothing at all.

Major ELLIOT: It is, of course, true that these cases are intricate and difficult. We are all familiar with the problem as to the commencement of a century— whether, for instance, the present century began in the year 1900 or in the year 1901. Hon. Members have repeatedly put to me a sense of grievance which they have felt on this matter in their own personal affairs, and I have had considerable correspondence with hon. Members on this point. In some cases one is able to do something, and in others, unfortunately, not. In some cases one is able to explain the difficulty, but in more cases it is true that the individual in question is left with a sense of grievance and injustice. At the same time, a sense of grievance and injustice in connection with Income Tax is no novel phenomenon. For instance, the teaching profession have pointed out that it is a most unjust thing that the heavier Income Tax which we imposed last September should fall on them when, by reason of the cuts that were imposed the previous year, they are in receipt of a lesser income. I will, however, look into this and see whether before next year the wit of man can devise anything that will be satisfactory in this respect. There will always be marginal cases, and a marginal case always creates a sense of injustice and people think that they are only receiving bare justice, and not very much at that. If it will satisfy my hon. Friend, I will look into it, and I shall be willing to discuss the matter with him either here or at the Treasury. With that, perhaps, it will be possible for him not to press the Motion.

Sir A. M. SAMUEL: I will willingly withdraw my Clause, and I shall avail myself of my right hon. and gallant Friend's kind invitation and do myself the pleasure of discussing it with him, and I hope I shall convince him that this is an injustice which can be stopped in some way.

Motion and Clause, by leave, withdrawn.

NEW CLAUSE.—(In come Tax, not to be payable in respect of reductions, etc., in remuneration of local government employés in consequence of financial situation.)

The amount of any reduction in or deduction from the salary (including fees) or wages of any officer or servant of a local authority made whether before or after the passing of this Act, and whether voluntarily or otherwise, with a view to economy in consequence of the financial situation shall not, for the purposes of Income Tax, be deemed to form part of the salary (including fees) or wages of such officer or servant or be assessable for the purposes of the payment of Income Tax.

For the purposes of this Section the expression "Income Tax" includes Surtax and the expression "local authority" includes a local authority as defined in Section three of the Local Government and other Officers' Superannuation Act, 1922.—[Sir H. Jackson.]

Brought in, and read the First time.

Sir HENRY JACKSON: I beg to move, "That the Clause be read a Second time."
This arises out of the national crisis last year. May I read a relevant passage from a circular issued to local authorities in September last by the Ministry of Health:
Reductions are being made in the emoluments of classes of local officers and in the remuneration of doctors and chemists under the National Health Insurance Scheme. The conditions of local government service and the range? of salary vary so materially that His Majesty's Government do not think it practicable, even if it were desirable, for them to impose any hard and fast rule on local authorities in the matter, but they are confident that officers in the local government services not affected by the reductions in emoluments above referred to will be prepared to make their contribution in the present emergency and they think each local authority should discuss the situation with their officers with the object of ensuring that all may have an opportunity of sharing equitably in the sacrifices that are demanded in the national need.
Following the receipt of that circular, all local authorities, great and small, had interviews with their officers, and it was made quite plain that there must be some reductions in salaries. Questions have now arisen for the purpose of Income Tax in regard to this deduction. I am advised that the Inland Revenue have now decided that Income Tax shall be paid on the whole salary before the deduction was made in those cases where officers had collectively agreed to receive
temporary reductions during the period of the economic crisis. In a word, local government officers, in spite of their having responded to the circular of the Minister and having had interviews with the employing authorities, are faced with the problem of paying full Income Tax on their gross salary before these deductions were taken off. I understand that the basis of the Inland Revenue's claim is that these deductions are in fact gifts by the local government officers to the employing authority and, therefore, to the ratepayers in the district, and that the general procedure regarding gifts should be followed. I think it is straining the conception of a gift very materially if local government officers, in many cases men of very small incomes because of their loyal response to the appeal made to them should not only have to suffer a cut in salary, which is grievous enough, but at the same time should be asked to pay full Income Tax. It seems to me, therefore, that the equity of the claim is overwhelming.
There is a further point. In the case of local authorities which possess trading undertakings, if this rule is still maintained we shall have the startling fact that the Inland Revenue will be receiving Income Tax twice over. They will be receiving it under Schedule E from the unfortunate officer, and they will be receiving it under Schedule D, because the revenue from the undertaking will be increased by the amount that the officer has given up. I am speaking on behalf of the National Association of Local Government Officers and I have authority to say that the Clause receives the support of the Association of Municipal Corporations, of the County Councils Association, of the British Medical Association and of the Rural District Councils Association. In a word, I think I may claim that I am speaking for a united local government, not only for its officers but for the great employing authorities.

Major HILLS: I support this Clause. I know very well the case that the Inland Revenue makes on these occasions. They say the Income Tax payer suffers when he is subject to a reduction in his salary but, when he gets an increase, he is assessed on the smaller amount and the Revenue loses. But that does not apply in all cases, because some men may have left the public service before any restora-
tion of their salaries takes place. It is, at any rate, an immediate and a very strongly felt injustice. It is felt that, if a man has given up a part of his remuneration, he has done quite enough to help the country out of its present economic difficulty and it is not fair that he should suffer a second disability by paying tax on money which he never received. I believe there is a further injustice in the case of local authorities. If a man is in private employment and has a reduction of salary, I believe he can, by resigning the employment and accepting a new engagement at a lower rate of remuneration, escape this special charge. The official of the public authority is not able to go through that procedure. He has to submit perhaps to a lower salary and cannot obtain a new engagement, and therefore he suffers a special disability which does not affect men and women in private employment. I do not know whether the Financial Secretary to the Treasury can do anything in the matter, but it is a case of very real injustice which hits a class of people who least deserve to be hit, and, if possible, I hope that some remedy will be adopted.

Lieut.-Colonel ACLAND-TROYTE: I support the very strong case which has been put forward by my hon. and my right hon. Friends who have proved the case up to the hilt. I have really risen in order to inform the Financial Secretary to the Treasury that this matter came before the County Councils Association yesterday and that they unanimously decided to support the Clause.

Major ELLIOT: This is a case which has certainly attracted a considerable amount of attention, especially among local government officers. In the first place, it seems that a hardship exists. A man makes a gift of part of his salary to his employing authority, and subsequently finds that the contribution being a gift, and therefore within his power to give or to withhold, his salary remains the same and the Inland Revenue authorities inevitably assess him upon that salary. He says, "Here is a great injustice, and the greatest injustice of all is that the Inland Revenue is getting this money twice over. First of all, it taxes me, and then it taxes my employer." That is not so. A gift is a gift, and a
gift given for example to a gas undertaking of a local authority retains its character as a gift. Whether an employé has made, directly or indirectly, a voluntary refund or gift of part of his salary that sum retains its character in the hands of the recipient, and being a gift or a voluntary payment it will be excluded from the computation of the profits of the undertaking. In other words, the full salary will be admissible as working expenses, and there will be no double charge for taxation. A small injustice will be removed by the proposal of the Mover of the Clause, but what about the greater injustice? [Interruption.] What is the reason for officers of the local authority desiring that these sums should be regarded as gifts and not as cuts? It is the very simple reason that if they are regarded as gifts, their salaries have not been touched, and therefore their superannuation is calculated on a higher scale.

Lieut.-Colonel ACLAND - TROYTE: My right hon. and gallant Friend has apparently forgotten a Bill which was introduced yesterday.

Major ELLIOT: Not merely was a Bill introduced yesterday, but a Measure received the Royal Assent on the 13th of May.

Lieut.-Colonel ACLAND-TROYTE: A Bill was introduced yesterday.

Major ELLIOT: There may be other Bills, but I am talking of a Bill which has already received the Royal Assent. My hon. and gallant Friend the Member for Tiverton (Lieut.-Colonel Acland-Troyte) seems to indicate that I was speaking in ignorance of the subject and did not know recent legislation on the point. I am dealing with the question of gifts and the complaint of the donors of gifts that they are taxed twice. In fact, I have dealt with that point, and I think I have made it clear that that sort of thing does not take place. Secondly, I am dealing with the question as to why a servant of a local authority should desire to have a cut registered as a gift and not as a cut. In general, it is because a donation registered as a gift and not as a cut leaves one's salary at the higher scale, and therefore one is enabled to continue to be rated at the higher scale for the purposes of superannuation. Obviously, that is a great inducement. The citizen
cannot have it both ways. If he is to have the advantage of the superannuation, he must be prepared for the time being at any rate to put up with the inconvenience of the higher assessment. I have been able to give my hon. and gallant Friend the Member for Tiverton the example of a Bill obtaining the Royal Assent as a result of which the citizen is enabled to reckon his salary at the higher scale for the purposes of superannuation and at the lower scale for the purposes of Income Tax. How is that brought about? It is brought about by the cut being definitely reckoned as a cut, and by the local authority promoting legislation to make that cut inoperative for pension purposes. It is a very intricate matter, and I am anxious to carry with me my hon. and gallant Friend the Member for Tiverton, who is a member of a local authority and has a personal knowledge which, I frankly admit, I do not possess. Does he quarrel with me in any of the stages I have so far reached?

Sir H. JACKSON: If a Local Government officer has had a cut, will his superannuation be continued on the higher scale provided he pays his contributions on the higher scale? Do I understand my right hon. and gallant Friend to say that that is so?

Major ELLIOT: Obviously, that is a matter for the local authority. The fixing of superannuation allowances is clearly a matter for the local authority. If, however, the officer's salary is cut, the Inland Revenue will assess him upon the cut salary and not upon the higher salary. [Interruption.] The point brought forward by my right hon. and gallant Friend the Member for Ripon (Major Hills) was a general point which we are all accustomed of the man whose income has fallen and who is assessed on the higher salary of the previous year. That must be so in regard to every class of Income Taxpayer in these years of falling salaries and falling trade. I am now dealing, not with the general case, which, it semed to me, was being argued by my right hon. and gallant Friend the Member for Ripon, of the person who has had a higher Income Tax while in receipt of a lower salary. That has been common to all citizens in recent years. I was arguing upon the special case of the local government or other officer who had made a
gift of a part of his salary to his local authority, and finds, in spite of that, he is being assessed by the Income Tax authorities, not for one year, but for many years, on his salary as if he had not made the gift to the local authority. If his salary is cut, then he will not pay except on the cut salary. If then he is to protect his superannuation, he can only do that by legislation promoted by the local authority.
It may be said that is a heavy burden to lay upon the local authority. I do not think we can get away from that. The fact is that some local authorities have dealt with it in that way by promoting legislation. There was the Superannuation (Temporary Provisions) Bill promoted by the London County Council which applies also to the Metropolitan borough councils. The Minister of Health has stated that in general he raises no objection in the special circumstances to the principle of the proposal that existing superannuation rights should not be prejudiced by arrangements due to the crisis of last autumn. The Minister of Health indicated he could not contemplate any Government legislation on the subject this year, but that is Ministry of Health legislation and has to deal with local authorities. What I am arguing is whether the Inland Revenue comes into that at all. I am pointing out that the Inland Revenue is not concerned in this matter.
I hope that that clears up the position. Let me recapitulate it. If it is a cut, then you are assessed on the cut salary. If it is a gift, you are assessed upon the higher salary. If it is a cut, your superannuation is prejudiced, but that prejudice may be put right by legislation introduced, not by the Exchequer, but by local authorities under the aegis of the Ministry of Health. That being so, I hope my hon. Friend will not find it necessary to press the Clause.

Sir H. JACKSON: I beg to withdraw the Motion.

Motion and Clause, by leave, withdrawn.

NEW CLAUSE.—(Amendment in respect of duties for licences on motor cars.)

As from the first day of January, nineteen hundred and thirty-three, the Second Schedule of the Finance Act, 1920, shall be
amended by the substitution in paragraph 6 of the words:
Exceeding 6-horse-power and not exceeding 12-horse power:
£1 for each unit or part of a unit of horse-power in excess of 6-horse-power.

Exceeding 12-horse-power and not exceeding 20-horse-power:
£12 and 10s. for each unit or part of a unit of horse-power in excess of 12-horse-power.

Exceeding 20-horse-power.
£16 and 5s. for each unit or part of a unit of horse-power in excess of 20-horse-power.

for the words:

Exceeding 6-horse-power:
£1 for each unit or part of a unit of horse-power." — [Captain Strickland.]

Brought up, and read the First time.

Captain STRICKLAND: I beg to move, "That the Clause be read a Second time."
9.30 p.m.
If this Clause is carried by the Committee, I believe it will be of the greatest possible benefit to the motor Trade, and will largely affect employment in that trade. There has been a continual annual rise in the number of cars in use in this country. In the year 1922, the number of cars licensed was 315,000. In the year 1931, the number had risen to over 1,076,000 cars. There was an annual increase of 29.2 per cent in the number of cars that were actually licensed annually in those years. The receipts from the Inland Revenue in that period increased by 36.1 per cent between the years 1922 and 1931. The point I want to emphasise is that, although this great increase has occurred in the number of cars licensed, and in the total revenue which has accrued to the Exchequer, the average rate obtained for cars in the country has shown a gradual decline. Had these duties been spread over the whole range of horsepower in which cars are produced, there should have been a considerable increase in the average per car, but there has been a steady fall since 1922. In that year the average duty per car was £15.5, and in 1931 it had fallen to £12.5, a decrease of no less than 19 per cent. Since 1922 there has been a gradual diminution in the horse-power of the cars produced, and a gradual fall from what may be called the average horse-power car down to the lower grades of car which are in more popular use in the country. These smaller
cars are being purchased to-day in very much greater numbers than in former years, and that process is continuing.
There are certain reasons which contribute to this fact. There is, of course, the fall in purchasing power which has necessitated people buying smaller-powered cars. This demand for the small power car which is made by mass production has enabled the manufacturer to reduce the price continuously, so that there is a great demand to-day for these low-power cars to reach the limited purse. The effect has been two-fold. There has been the effect on the home market, and side by side with it we have had the effect on the export trade, due to the mass production, and by the great efficiency of our British motor trade the British small car stands preeminent for mechanical efficiency and reliability of workmanship. It has a much lower petrol consumption, which has a great effect on the revenue produced to the Exchequer. At home, we have entirely beaten out the foreign competition. In the first four months of this year imported cars numbered only 396 against a total of no less than 5,199 in the first four months of 1928. That is due to the protection given to the British motor industry, and there has been a steady growth in the employment of men in the industry. In the first four months of this year we exported 8,771 cars as compared with 5,923 in the first four months of 1928. This increase in our export trade has been mainly due to the low tax on the horse power of these smaller cars which are produced by mass production, and it has enabled us to place the cheap car on the foreign market.
This country is the most heavily taxed motor country in the world, being taxed on horse power. What has happened side by side with the increased production of the smaller cars in this country has been a great and distinct fall in the manufacture of the higher powered cars. The higher powered cars cannot be introduced for use in this country because of the extraordinarily heavy tax which is at present imposed upon them, and that means that not only are we losing in the production of the higher powered cars in this country but we are also debarred from being able to place on the foreign market the higher power cars that they require on their rougher country roads as compared with the better city roads.
That is a very great detriment to the motor trade, and our Amendment is designed to meet that case. If we could by means of the Amendment lighten the tax on our higher powered cars we might enable the higher powered cars to be run in this country in sufficient numbers to make mass production a business proposition, which would enable our manufacturers to turn their attention to the export trade in this particular class of car, which is wanted in our own Dominions and in other countries abroad, from which trade the British manufacturer is entirely cut off, to his own detriment and that of the nation in consequence of our heavy motor taxation.
I appeal to the Chancellor of the Exchequer to give the most careful consideration to this point, and I do so for the reason, first and foremost, that there is an extraordinarily large market abroad for the high powered cars. If we could enter the market against the foreigner there would be something like 100,000 additional cars made in this country of the higher powered type. But it is essential that we should lower the taxation if we are to encourage that production. We are going to hold the Ottawa Conference. There will be a suggestion that this country and the motor manufacturing Dominions should have a chance in the Empire market. Now is the time when the Chancellor of the Exchequer should be able to give an assurance in the terms of this very reasonable Amendment, which would not mean a great loss of revenue to the Exchequer, or, if he is unwilling to accept the Amendment, he should undertake to appoint a technical committee on the lines of the recommendation made by the Departmental Committee on the Taxation and Regulation of Motor Vehicles, 1923, in their Third Report, when they said:
In our opinion this aspect of the question should he taken into consideration by the technical committee which we recommend should be set up to consider the whole question of horse-power taxation.
It may be said that the acceptance of the Amendment will mean a loss of revenue. I believe that it would mean a slight loss of revenue, but it would not run into millions of pounds. There might be a slight loss of revenue on the high powered cars for the time being, but I appeal on the ground that not only should we be employing many more men in the motor trade who to-day are un-
employed, but that we should also be getting the benefit generally that comes from improved trade. Side by side with that we should be producing a car inside this country whose petrol consumption would be on a much higher scale than is the case with the smaller cars that are run so much in this country. Therefore, on balance, there might be a small drop in the revenue from the horsepower tax, but we should find that more people would be employed and that we should receive more in Petrol Duty in consequence of the greater use of the higher powered cars. Therefore, I urge upon the Government the acceptance of the Amendment. Failing their willingness to accept the Amendment I ask that they should undertake to appoint a committee of inquiry into the taxation of motor cars to take place immediately, so that when we go to Ottawa we should have a chance to say: "We in England are prepared to supply the cars you want and the type you want for your rough roads in the country districts as well as the better roads in your cities and towns."

Dr. O'DONOVAN: I support the Amendment not as a motor manufacturer, not as one interested in the manufacture or the selling of motor vehicles, but from the point of view of the encouragement of the transport industry. The lesser the tax the more people will be inclined to use motor transport and the greater encouragement will be given to trade already labouring under difficulties. Perhaps two of the greatest reasons for using the roads, apart from pleasure, are the transport of food and drink. If we do anything to maintain the high mice of food or drink we are taxing food and drink just as much as if we put a tax on at the ports or in the shops. Anything that lessens the cost of transport of food and drink is a gift and a help to the very poorest in the community. Water is transported in pipes at no expense to anyone save the ratepayers, but beer is transported either in railway trains or motor lorries. We know that the Chancellor of the Exchequer is a man extremely hard up, and therefore has to affect a hard heart, when we know that it is of a softest consistency. But we know that it is almost useless to approach him with any blandishments to attempt to reduce the present taxation upon beer, which is an article of national consumption.

The CHAIRMAN: I am afraid that the hon. Member does not realise the Amendment that is before the Committee.

Dr. O'DONOVAN: If I may explain myself more plainly, I may say that I am trying to indicate that if we do anything to cheapen the transport of an essential article of diet we are doing something to lessen its price. Anything which encourages the manufacture of cheaper motor transport is essentially a help to those who manufacture food and drink. It is a help to enable them to sell at a lower price, and I think it is legitimate to put forward that appeal to the Chancellor of the Exchequer. If he can give nothing with his big right hand, perhaps he might give a little with his left hand. It is because I see little hope of appealing to him directly on the merits of beer, that I appeal to him indirectly on the question of motor transport. There are hundreds and thousands of men who are earning a most honest income in the motor transport trade, and those who are transporting beer are a part of the community who—

The CHAIRMAN: The hon. Member's application of his argument to the Amendment certainly does make it relevant, but I must ask him to devote himself to the point of transport and not to the virtues or otherwise of the articles which he is transporting.

Dr. O'DONOVAN: I accept your instructions in the most filial spirit. I only press the point for those who are unwilling to hear, for those who are hard of hearing, and for those who are hard of heart. It would be a great encouragement to those who employ motor transport in the transport of beer and food if the Chancellor of the Exchequer would accept the Amendment, or promise to give it consideration during the year.

Sir P. HARRIS: I would like to support the plea for consideration of this matter by a committee. Every Chancellor of the Exchequer has undertaken to consider the question of the basis of the horse-power tax. I am familiar with the conditions in some of our Dominions. Up to about 12 months ago the greater part of the trade in New Zealand and Australia was held by the American producer entirely on account of the
horse-power tax in this country. Where-ever they could they bought the British article, and they will always endeavour to do so, but, unfortunately, the low-power car which has been stimulated in this country by the basis of our taxation, although suited to the smooth flat roads in England with their easy gradients, is quite useless in mountainous country and on rough roads, in an undeveloped country with practically no road surface at all. Sir William Morris made a brave effort to produce a car suitable for the Colonial trade. He designed a Dominion car about 18 months ago with great success, so much so that during the last 18 months there has been a complete change-over in New Zealand and the import of British cars has overcome the American trade. That shows what can be done. But more can be done if there was a change from the horse-power tax so that mass production of cars for Dominion trade as well as for British trade might be stimulated. It would be a great thing to send a message to British manufacturers, who are feeling the general trade depression —there is not the demand in the home trade which there was a few years ago, and they have to look more and more to the world trade to keep their factories in full time—that a commission or committee is to be appointed to consider the whole question of the basis of motor car taxation.

The MINISTER of TRANSPORT (Mr. Pybus): I have listened with great interest and complete sympathy to all the arguments which have been put forward regarding the export trade for British cars. I cannot, however, agree with the hon. Member for South-West Bethnal Green (Sir P. Harris) that the desirable end he has in view will be attained by setting up a committee to inquire into the question. It is an important and very far reaching question. The new Clause deals with a different matter. It deals with a reduction of the horse-power tax on high power cars, leaving the tax on small cars at the same amount as it is now. We have to look at this from various aspects. Hon. Members who have supported the Amendment have done so with the mistaken understanding that it would cost very little. As a matter of fact, it would cost,
according to our computation, no less than £1,250,000 this year, an amount which cannot be described as small and which is a loss we are not prepared to face at the moment. We are not justified in removing or decreasing the tax on the high power luxury cars in this country and leaving the tax on cars up to 12 horse-power on its present basis. May I give one or two figures. On a 16 horsepower ear the tax would be reduced, if this Clause were passed, from £16 to £14. On a 30 horse-power car it would be reduced from £30 to £18 10s., and on a 44 horse-power car, which is the Rolls-Royce class, it would be reduced to £22.

Captain STRICKLAND: Would not the Minister sooner have a receipt of £18 10s. on a 30 horse-power car than a receipt of £12 on a 12 horse-power car?

Mr. PYBUS: The hon. and gallant Member is going on the assumption that everyone who now drives a 12 horse-power car would drive a 30 horse-power car, and as I say that is an assumption which we cannot accept. Therefore, in view of the great loss to the revenue which would result and without being in any way unsympathetic to the motor car industry I cannot accept the Amendment. Like the hon. Member for South-West Bethnal Green, I have travelled abroad a good deal, and I have been hurt to see so few British cars and so many foreign cars in our Colonies and Dominions, but at the same time I do not think that the solution of the problem for this year at any rate lies in the direction of a reduction in the revenue of £1,250,000. I will promise to consider very carefully whether an inquiry should be made as to a change in the method of assessing the taxation of motor cars which, while not damaging seriously our own revenue, might assist the export trade. Beyond that I cannot go. I trust the hon. and gallant Member will withdraw the Amendment.

Captain STRICKLAND: Do I understand that the Minister of Transport is prepared to appoint a committee of inquiry?

Mr. PYBUS: I am unable to go as far as that. I said that I would consider carefully whether an inquiry should be made.

Sir ROBERT H0RNE: I am very loth to interfere in this discussion, but I confess that the reply of the Minister seems to be somewhat obscure. The importance of this matter can scarcely be exaggerated. Everyone who has travelled knows that the sale of British cars in the younger countries of the world, where you have not the splendid roads which we have here, has been greatly impeded by the fact that manufacturers in Great Britain are compelled by the type of taxation imposed upon them to design a car with as low a power as possible, which is still able to manipulate the smooth surfaces they get on the roads generally in the British Isles. The result has been that so far as Canada and South Africa, Australia and New Zealand and India are concerned, the sale of British cars has been greatly decreased, by reason of the fact that we do not make cars of sufficient power to compete under the conditions with which cars in those countries are met.
All over the countries that I have mentioned you find American cars of high power which can take any sort of country in their stride, whereas the British car is at a hopeless disadvantage. There is no question at all that this has been achieved because the British manufacturer has been circumscribed in the type of his manufacture. Everyone knows that the cheapness of a car depends on the number of a certain model which can be produced. The British manufacturer has been accordingly compelled to manufacture a car for his home market, whereas the American manufacturer and manufacturers in other countries have had not only their own country to provide for, but all the other countries of the world have been open to them and they have been able to indulge in mass production
That is the real problem. I hope that the Minister is facing it. There may be difficulties in connection with the Exchequer. I know that the Chancellor of the Exchequer may find it difficult to forego a certain amount of revenue which he derives from this taxation. I was so bold as to do what I seldom do, that is to write a letter to the newspapers after a protracted tour of some of our Dominions two or three years ago. In that letter I set forth the very difficulties which have been described by the Mover of this new Clause. I advocated a system
of taxation upon motor cars so that the British manufacturer should be as free to make the type of car which would be universally suitable as were his competitors elsewhere. I would not be indulging in the repetition of arguments which I have put before the country for some years if I were assured that the Minister realised the problem with which we are confronted. I must confess that I have no assurance of that kind in my mind after having listened to his speech. We wish for something much more definite from him. We want to understand that the problem is to be confronted with a serious desire to meet its difficulties, certainly before we come to the conference at Ottawa, in a country where this matter is very well understood.
We have been saved from absolute disaster in the Dominion markets by the extent of the preference given to us. I myself have had a little to do with certain negotiations in connection with increasing the preferences in New Zealand and Australia, for the very purpose of seeking to protect us from the disastrous effects of British taxation. I beg the Minister to assure us that he has this matter really in view, and that he intends to cope with it in a way which will enable our motor-car makers to compete in all markets of the world upon conditions which give them a competitive chance. I hope that the Minister is going to tell us a little more than he has already confided to us.

10.0 p.m.

Lord APSLEY: I was not going to ask the Minister to accept this Clause, because I knew he had no power to do so. The Financial Secretary would not allow him, and he is not here. Even if the Financial Secretary were here the Chancellor of the Exchequer would not allow him to accept the Clause. But now that the Lord President of the Council is present, I wonder whether I might be bold enough to ask him to consider this matter very carefully and to see whether it cannot be dealt with on the Report stage of the Bill. My right hon. Friend the Member for Billhead (Sir R. Horne) said that the matter should be decided before the Ottawa Conference. It is a matter of importance not only to this country but to the whole Empire.
The Minister of Transport knows full well that the horse-power tax is now obsolete. It has served its purpose very well indeed in the past. It was responsible for the fact that we drove American cars off the market in this country. At that time we had not got a reasonable tariff system which could have effected the same end in a different way. But now that we are protected by a reasonable tariff system the horse-power tax is no longer required. While the tax drove American cars off British roads, it also drove British cars off the open spaces of Australia, India, Africa, South America, and other countries.
I ask the Minister to consider the matter very carefully indeed. He said it was a question of taking the tax off the higher powered cars and leaving it on the smaller powered cars, and he quoted the case of the Rolls-Royce car. I myself have a Rolls-Royce car. It is a most excellent car and works beautifully, and I bought it for £130. It is a poor man's car, for the simple reason that there is no market for the second-hand Rolls-Royce, because to own such a car costs £50 a year. Yet the car is one of the finest productions of British engineering. It is undoubtedly because of the horsepower tax that the car is prevented from getting a market. I ask the Minister to consider very carefully whether we cannot have, on the Report stage, such a revision of the horse-power tax as is suggested in this new Clause. That would allow us to produce the car of big horse-power, and it would not affect revenue owing to the increased use of such cars.

Major BEAUMONT THOMAS: I must confess to a little disappointment with regard to the answer of the Minister of Transport. The new Clause at any rate has produced a scheme of some kind, and I think we are entitled to have from the Government a statement that if this scheme is not adopted some other scheme will be considered in the near future. Behind the McKenna Duties we have built up in this country a most important, industry, which employs directly and indirectly many hundreds of thousands of people. But it cannot expand any further. We have no competition in our home market, but our export market is closed. Because of the system of motor
taxation carried on by successive Governments we have a design of motor car suitable for this country but absolutely useless for export purposes. What we want to do now is to expand our motor industry by producing a car which is suitable for the export trade. We are entitled to ask for help from the Government for this industry so that we can expand the export trade. The Minister of Transport says that this proposal would affect revenue. I believe that it would increase revenue. We want to encourage people to buy cars of higher horse-power, but that does not necessarily mean luxury cars. There are cars of higher horsepower which could not properly be described as luxury cars, but are general utility cars and it would be much easier to put cars of that type into the export market. I add my support to the suggestion that in the near future and at least before the Ottawa Conference— because this will be a most important matter at the Conference—some inquiry, not a committee, should be started with regard to this question of the horsepower tax.

Lieut.-Commander AGNEW: I ask the Minister, when he is inquiring into the system of taxation of motor cars, to consider the introduction of an entirely different form of motor taxation by means of an ad valorem duty. Such a method of taxation would apply fairly to all classes of the community and people would pay to the Exchequer according to their means. It would have another important effect. It would enable British manufacturers to produce for the home market a high-power car and yet sell it cheaply—a car of the mass production type which would be suitable also for exportation to the Dominions. I do not think that the Chancellor of the Exchequer by adopting such a method of taxation would be depriving the Exchequer of revenue. There would still be a demand for cars of the high-class and more expensive type such as the Rolls Royce. I ask the Minister to give careful consideration to the idea of an ad valorem duty.

Mr. HALES: I wish to trespass on the time of the Committee for a few moments in order to throw out a few hints which I think may be of benefit to the Ministry of Transport in the near future. For 35
years I have been connected with the motor industry. I believe I had the first motor car in Staffordshire in 1897 and from that time onwards I have been on the road in cars. Sooner or later, and the sooner the better, we have to realise that our taxation arrangements will have to be reorganised from top to bottom if we are to hold our industry together. A few months ago I was through the Dutch East Indies and there was hardly a British car to be seen from one end of Java to the other—a 600 mile trip—for the simple reason that our horse power is too small and too rapidly running engines are not suitable there, with the result that American cars have swept the board. The same remark applies to India where formerly we had not above 5 per cent of the business. Now, is it a little more, but the running of cars there is mostly in the towns, to which our small cars are suited. But in Malaya, China, Japan, Siam, in fact the whole East the same remark applies, namely, that we must make a car of bigger horse-power and make it so that the model can be adapted to the purposes of oversea trade. That is a sine qua non if we are going to hold our trade.
We are face to face with the position that the Ford works which have been inaugurated at Dagenham could make the whole output for England if they got the orders. There is now the possibility of only six or eight English manufacturers surviving the competition which has now to be faced. In Wolverhampton the Star works, one of the oldest factories in England is up for auction and the goods are being sold out—bankrupt! The same thing could apply to other well-known firms and I beg of the Minister that he will give this matter immediate attention. I make that appeal as one who knows and one who is speaking with authority. I am not an alarmist. I am an optimist but I say that we have to grapple with the position and we must not allow laissez faire to take the place of downright thorough going practical effort to save our business.
I feel that the Committee will allow me to express my opinion because I am not talking through my hat. I am dealing with a matter about which I know something. I have sold British cars all over the world, and you have to go out on a commission basis, paying your own expenses, to get your living as the result of
your sales, to find out what British trade is up against. Manufacturers would ask me if I could sell their cars, and I would say, "Yes, I can sell a small quantity, but before I can sell a single car in a foreign country they will say, 'What about the spare parts?'" In those countries, if you have a broken axle perhaps thousands of miles away from anywhere, you cannot telephone and have a new one sent on by the next train. I can sell a car in Calcutta to-day, but the purchaser will insist on being able to get the parts as required. That car has to be made so as to suit local conditions, and so that the purchaser can be assured that he will be able to get anything he requires in connection with the car without having to wait for three months to have it sent out from the factory in England.
It is no use putting our heads in the sand like the ostrich and pretending that there is no danger. We are in a ridiculous position, just as we were in 1896 when the law compelled a red flag or a red light to be carried in front of every car here, and France ran away with the trade while we were pulling up our socks. The trouble is that we keep on thinking of what we are going to do to-morrow, while the foreigner does it to-day and takes our trade. I wish that I could take Members of this Committee with me on my journeys abroad, because until you get out of these islands you do not realise what we have to face in business competition. You are sitting in a fool's paradise as far as trade is concerned. We men who are out in the front trenches know what is happening, but those on the Treasury Bench only hear the rumbling of the guns. But if you cannot go out to see what is happening you should listen to those who know what is happening and can put you on the right road to prosperity, and that is why I ask you to listen to me.

Captain NORTH: I hope the Minister, when considering the method of raising revenue from the motor car industry, will not exclude an entirely new system of taxation. There are three methods by which we can obtain revenue from the motor car industry. The first is on the motor car itself, the second is on the fuel which it consumes, and the third is on the tyres on which it runs. It seems to me that much the fairest and best way
of obtaining taxation from motorists is not by a horse-power tax at all, because I think that has proved to be a very ruinous taxation of the motor trade. Much the best and fairest way, I am convinced, is by weight, by the unsprung weight of the motor car. You can get a perfectly fair revenue from a taxation on weight, and at the same time you will not stop the motor manufacturer from designing a motor car which will sell, not only in this country, but in the Dominions; and, after all, that is what is wanted. I suggest to the Minister that if and when he makes an inquiry into the whole present system of motor car taxation, he should remember that probably one of the best and fairest ways of raising revenue from this source is by weight, by taxation on fuel, and by an Excise Duty on the tyres.

Mr. HERBERT WILLIAMS: It has been obvious for many years that the export trade in British motor cars has been gravely hampered by the fact that the design of motor cars has been influenced by considerations that have had nothing to do with engineering but have been solely related to taxation. By training, I am an engineer, and I am aware of the series of circumstances as a result of which we have deprived thousands of our own people of employment and of the opportunity of building up great markets, not only in foreign countries, but in other parts of the British Empire. You cannot talk to any inhabitant of any part of the British Empire, where the roads are not quite of our quality, but they will tell you that the fact that our cars have high-speed engines and relatively low acceleration compared with American vehicles is an outstanding reason why our vehicles are not bought in a great many countries. I do not suggest that the Clause now under discussion represents a complete solution of this problem, but I urge most strongly on His Majesty's Ministers that they should give some undertaking that they will examine the situation, because I believe that this Clause would not only solve the problem, but would also yield to the Exchequer a larger revenue than they are getting now.
A large number of people to-day buy low-powered cars because of the excessive taxation on the high-powered cars. The sliding scale which we suggest in
this Clause would have the effect of inducing a great many people to buy high-powered cars, because as a result they would not be paying very much more in taxation—a little more—and they would get the service; and, if you consider the point of view of public safety, I believe I am accurate in suggesting that a large proportion of the accidents that take place in this country are due to the inability of people driving low-powered cars to pass the large vehicles that they find on the road to-day. The quick acceleration car is the safest vehicle to drive. I do not expect the Government to accept this Clause to-night—it would not be reasonable to accept such a complicated scheme at such short notice—but I hope they will seriously take into consideration this point, which, if dealt with adequately, will probably in the future provide employment for tens of thousands, increase the safety of our roads, and yield an increased revenue as well.

Mr. PYBUS: I have listened with very great interest to the speakers who have given their opinions on this Clause since I last spoke. I can assure my right hon. Friend the Member for Hillhead (Sir R. Horne) that both myself and the Ministry are fully aware of the difficulties in which it is said the present position of rating of horse-power taxation places the British car manufacturer regarding the export of his ears, but the Clause before the Committee is really not the Clause which has been debated at all. The right hon. Gentleman and those who followed him have put forward nothing less than a proposal that the method of taxation by horse-power rating should be abolished, and that some other system should take its place. If that be so, and if there be a good deal to be said for a reconsideration of this method of assessment of taxation, I shall be very glad to bring the matter to the attention of my right hon. Friend the Chancellor of the Exchequer, and, in consultation with him, take any steps that we may consider necessary in order that the trade and those concerned can put their views before us on this important question and give it proper consideration.

Captain STRICKLAND: I thank the Minister of Transport for the way in which he has received the suggestion. I want to emphasise the urgency of getting this
matter decided before our representatives go to Ottawa. I urge that point because of the effect it will have on employment. I am sorry that with the Lord President of the Council here we have not had a definite promise of an inquiry. It will not cost the Government much to promise that there shall be a definite inquiry made into this question without prejudice, and I appeal even now to the Minister of Transport to promise us that an inquiry will be held by a technical committee that understands the matter and that this shall be taken in hand at once. It cannot affect the Exchequer, but if it is carried into effect we shall get an expert opinion which will be of the utmost value and help our representatives in Ottawa to capture this big car market which is ours for the asking.

Question, "That the Clause be read a Second time," put, and negatived.

Mr. CHURCHILL: I beg to move, That the Chairman do report Progress and ask leave to sit again.
I venture to rise to move this Motion in order to elicit from the Government a statement of how they view the situation which has arisen this evening owing to the accidental non-discussion of the proposed new Clauses relating to the Beer Duty. [Laughter.] It is not a matter for laughter. The Government opposed these new Clauses, and I had no intention of voting against the Government, but there are enormous numbers of people, reputable and worthy people, whose trade, livelihood and interest are involved in this matter, and if by a mere accident the discussion of it was prevented, and there was, as it were, no vocal expression of the feelings that exist upon the subject, no statement of the case with all its hardships, no admonitory exposition to guide the finance for future years—if that were to take place, I venture to think that it would be deeply injurious to the Government and to the Conservative party. I know that my right hon. Friend the Leader of the-House is not a man to take small points or to take advantage of any accident of this kind. He has his duty not only as leader of the Conservative party, but as Leader of the House, to see that fair play and good and equal treatment are administered over the whole area of public business.
I have no complaint against the Government at all. They have done absolutely nothing wrong. The fault rests, undoubtedly, with those who were in charge of these important Amendments. I am stating the case quite fairly—the fault lies with them. My hon. Friend the Member for Canterbury (Sir W. Wayland) has been incessant in his attendance in the Chamber. [Interruption.] I mean it. I say he has been incessant in his attendance. [HON. MEMBERS: "Where was he? "] If hon. Gentlemen think this is a joke they are making a very great mistake. These great industries have to suffer in these hard times, but there ought to be a full statement of their case, and, even supposing a fault or error has been committed by an individual—as a matter of fact his was an absence for only two minutes out of an hour or an hour and a half when this matter was likely to come on—it is altogether unworthy of His Majesty's Government—it would be unworthy, I do not say it is— or of the House of Commons to penalise this trade and this interest in this way. They must offer us a Debate, a reasonable opportunity of discussion. [Interruption.] I do not say anything that the Government have done is unworthy; on the contrary, they have done nothing. No one is in the wrong except those who now appeal to the Government, but we are quite determined, and in my judgment it rests with the Government to offer some solution of this difficulty. [HON. MEMBERS: "Why?"] Because it will fee in the general interest that that should be done. [HON. MEMBERS: "No!"] I hear some Liberal cries of "No"—[Interruption]—well, they are all mixed up with us on these benches— but I invite the Government to offer us some consideration in this matter. In any case, it would be undesirable that this subject should be discussed so late at night as this. No one is seeking to challenge the view of the Government, they are going to have their tax, but there ought to be an opportunity for the case to be stated, and the fact that it has been missed by accident will, I am sure, not be treated by my right hon. Friend in a harsh spirit, or in the un-chivalrous spirit which some of the cries behind me have indicated.

10.30 p.m.

Mr. LANSBURY: I would like to say a few words on this subject. We who sit
here have submitted, have been obliged to submit, to a series of discussions of a purely academic character in which right hon. Gentlemen and others have engaged, though knowing full well that at the end of those discussions there was to be no vote taken, that it was simply a matter of airing their particular views. Right hon. Gentlemen have walked into this House at particular moments and claimed the right to occupy the time of the Committee, to usurp the time which otherwise might have been available to ordinary private Members, putting them to the inconvenience of having to sit here hour after hour on the off chance of getting an opportunity of speaking. I think that the right hon. Gentleman is the last person who ought to speak on this occasion, and I consider it sheer audacity and effrontery on the part of the right hon. Gentleman to walk into this Chamber at this hour of the night and standing up bully the Government. A Minister has the right to speak, but the right hon. Gentleman the Member for Epping comes in and demands the right to speak. Who is he to demand that right? I will tell the right hon. Gentleman what ought to have been told him long ago, and it is that he usurps a position in this House as if he had a right to walk in, make his speech, walk out, and leave the whole place as if God Almighty had spoken. There have been statesmen in this House of high intellectual qualities, but they have never treated the House of Commons in the contemptuous manner that the right hon. Gentleman the Member for Epping has treated it, for he never listens to any other man's speech but his own.
The right hon. Gentleman comes here to-night as an injured person, but he ought to have allowed the persons interested in this matter to put their own case. I am perfectly certain he has not done their case a shred of good by his bouncing and bullying manner, and I hope the Lord President of the Council will treat him with the contempt which he deserves. I say further to the right hon. Gentleman the Member for Epping that I hope this House of Commons, and any other House of Commons that he deigns to grace with his presence, will treat him in exactly the manner he deserves, and that is listen to him when they want to, and when they do not want to listen to him, go out, and
never submit to any bullying from him under any consideration.
On this question what has the right hon. Gentleman done? What does he know about it? What right has he to tell hon. Members how long people have sat in this House. The right hon. Gentleman does not know how long anybody has been here, and he does not know anything, of his own knowledge, of the proceedings of this evening at all. Therefore, the Government have no right to pay the least heed to anything he says, which is sheer impudence on his part. On this particular question no one has any right to make any complaint whatsoever. There was a Division, and any hon. Member who chose to take any interest in the proceedings of the Committee other than those in which they happen to have a particular personal interest, any Member who took that trouble would know that the next Amendment that was going to be called was quite a small one and would not have taken— [Interruption.] You do not know anything about it so hold your tongue.

Mr. CHURCHILL rose—

The CHAIRMAN: Does the right hon. Gentleman rise to a point of Order?

Mr. CHURCHILL: Yes, I rise to a point of Order, and I ask you, Mr. Chairman, whether it is in order for the Leader of the Socialist Opposition to use such an extremely offensive and provocative expression, and to tell me—addressing me in the vocative—to "Hold my tongue."

The CHAIRMAN: The right hon. Gentleman did what many Members do, and what I have often had to remind them is wrong, namely, addressing their remarks otherwise than to the Chair. But, with regard to the expression, I am bound to say that as there was a good deal of noise going on, I did not hear, although I was listening rather carefully, any particularly unparliamentary expression.

Mr. CHURCHILL: Further upon the point of Order. I am sure that the right hon. Gentleman who has just been speaking will not deny what he said in the hearing of us all. He said, "You hold your tongue." I would ask whether that expression is to come into our Parliamentary vocabulary?

The CHAIRMAN: I think that, if the right hon. Gentleman had said to me, "I should be glad if the right hon. Gentleman the Member for Epping would hold his tongue," it would have been quite in order. I think that his addressing an hon. Member not in the Chair in that way was a slip which perhaps, in the circumstances, need not be taken too much notice of. It is only an example of what I am constantly having to protest against—the habit, which is growing, of hon. and right hon. Members doing otherwise than address their remarks strictly to the Chair.

Mr. LANSBURY: I quite acknowledge that I was a little guilty, and I apologise to you, Sir Dennis; but I was led into it because of the horrible example of the right hon. Gentleman the Member for Epping (Mr. Churchill), who continually, when he addresses the House, takes occasion to say the most unpleasant things possible about my hon. Friends who sit on this side. But that is all beside the point. The point to which I now want to address myself on this Motion is that no one has any right to complain about what happened this evening— [Interruption.] May I ask you to ask the right hon. Gentleman the Member for Epping whether it is possible for him to behave himself by holding his tongue? [Interruption.] There are six names down to this Clause, and I should have thought that one of the six hon. Members might have been sufficiently interested in it to be present. It is not for me to offer the Government any advice. In a matter of this kind I myself, if I were one of the six, should have taken the ordinary course of approaching the right hon. Gentleman the Lord President of the Council, and should have been quite sure that whatever it was right to do he would have done. [Interruption.] I must ask—[Interruption.] There is, with children, a sort of habit that, when other people are speaking, they really cannot hold their tongues. The right hon. Gentleman has not grown out of his childhood, or else he is going into his second childhood. On behalf of those of my friends who, like myself, would like this matter discussed not merely in an academic matter, so that we can air our opinions and then go home, but discussed for the purpose of bringing it to a vote, I can say that we are quite certain that
the right hon. Gentleman in this matter, as I think in everything else where he has to give a decision, will give a right and proper decision which will be satisfactory to the whole Committee.

Mr. BALDWIN: After the fire the whirlwind, and after the whirlwind the still small voice. I have very little to say, but I would remind my right hon. Friend that there can be no question of there being no vocal expression, because this is only the Committee stage. On the Report stage, which will take place the week after next, the new Clauses are put down first, and, therefore, if this Clause is put down first, it will be taken at about four o clock in the afternoon, which is the best hour of the day for reporting purposes. May I say a word as to the procedure to-day? Those who were present yesterday and at Question Time to-day will remember that about midnight last night the Leader of the Opposition asked me how far we proposed to go. I was very anxious last night to finish, if we could, all the Amendments and start the new Clauses to-day. I knew that that would involve sitting up late. I knew that my friends who were moving new Clauses on the subject of the Land Value Tax were very anxious to start at a reasonable hour. I thought their wishes might be met as well as the wishes of the Opposition, and I suggested that, if we broke off at a point very little in advance of where we were, it might be possible to conclude the Committee stage to-day, even if we had to sit up rather late, and I adduced the reason that it was necessary, on account of technical questions connected with the Silk Duties Clause, to get the Bill up to another place by, I think, 16th June. That was agreed to generally, and through the usual channels; we discussed this morning the rate of progress which we thought would be fair for the remaining Amendments and Clauses on the Paper. The result of that arrangement I intimated to the House to-day, and what I said about this particular Clause was that the Committee might be reasonably expected to begin the Debate on the new Clause relating to the Beer Duty not later than 9.45.
Let us go back to the beginning of the afternoon. There was considerable in-
terest taken in the Amendments on the Land Values Clause, and we consumed more time than we had allowed for. I should like to say a word now in recognition of the way in which those who were most interested in the Debates tried to damp it down so that the arrangement might be fulfilled. The surprise came when the Silk Duties came up. I had expected an hour and a half for that. The Silk Duties went through with no discussion.

Sir P. HARRIS: Some discussion.

Mr. BALDWIN: Well, nothing to speak of.

Sir P. HARRIS: We were asked to cut down our discussion, and keep it as short as possible.

Mr. BALDWIN: That was the time when I left the House to seek refreshment. We were in advance of our time, a circumstance which must have been familiar to anyone who was paying any attention to what was going on. I recognised that the Clause would come on earlier than we had expected. I dined early because I did not know when I might be fetched, and I attended the Division at about half-past eight, and was told that the Clause would come on immediately. The hon. Member for York (Mr. Lumley), the Parliamentary Private Secretary to my right hon. and gallant Friend looked into the Lobby to see if he could meet any of the hon. Members who were interested in this subject, and he met the hon. Member for Leominster (Sir E. Shepperson) and advised him that the Clause would be coming up almost at once.

Sir ERNEST SHEPPERSON: I would like to say that I was not called. I had an Amendment to the new Clause of the hon. Member for Canterbury (Sir W. Wayland), but it was not going to be called, and it was not called.

Mr. BALDWIN: I was quite aware of that, but I did not wish to cumber what I was saying. The hon. Member for Leominster was the only Member seen by the hon. Member for York who was connected either directly, or indirectly, by way of moving an Amendment, with the Clause. But the odd fact is that there were nine hon. Members of this House connected with the Debate—six
whose names were down for the Clause, and three whose names were down for the Amendment—not one of whom cared to take the trouble to find out how the business was proceeding. I think that my right hon. Friend must acquit the Government of blame in this matter.

Mr. CHURCHILL: I do, absolutely and fully.

Mr. BALDWIN: I am glad that my right hon. Friend recognises that fact. I come to one other question. My right hon. Friend was anxious that I should do my duty as Leader of the House. I think that that duty is perfectly simple. It is to place myself, as we all of us do, in the hands of the Chair. It is not for me to say whether it is possible by any means to Debate the subject tonight or not, and I do not propose to give any expression of opinion as to my views whether it should be possible or not, because at the moment that is the prerogative of the Chair. I shall not express any views at all. If it is possible under the direction of the Chair for this subject in any form to be Debated, the Government are perfectly ready to take the Debate. If, on the other hand, it is not possible by the direction of the Chair, then those who were responsible for this Clause must be content to move it in its place on the Report stage.

Sir WILLIAM WAYLAND: May I make an explanation? As the chief delinquent, I want to offer my deep apologies to the Committee. I certainly have been in attendance at the House since early this afternoon. I have taken part in every Division. I took part in the last Division prior to the Clause being reached. I understood that the Clause prior to mine was to be debated, and I left the House for exactly six minutes. When I returned, I was only one or two seconds too late. I certainly did listen to the Leader of the House this afternoon and heard him say that the Debate would be taken probably about 9.45. [An HON. MEMBER: "Not later than!"] I understood about 9.45. I am not blaming the Government in any shape or form whatever. I take the entire blame upon myself, and I again offer my apologies to the Committee, because nobody feels so downcast
over this matter as I do myself. I only hope that there will be a chance to bring the matter forward on the Report stage, if we do not Debate it to-night. I apologise once more for any inconvenience—and I know there must have been a lot of inconvenience caused to hon. Members. I was afflicted by a concatenation of circumstances.

The CHAIRMAN: I think, after the words which fell from the Leader of the House, that perhaps it is incumbent upon me to give some expression of opinion. In matters of this kind the Chair must, of course, be guided by the wishes of the Committee as a whole, but, subject to that, it is the duty of the Chair on an occasion of this kind to give the Committee a certain amount of guidance as to what seems to be in accordance with the traditions and customs of the House. With regard to manuscript Amendments which are handed in on the Committee stage of any Bill, it has been the clearly recognised custom that the right vested in the Chair of selection or non-selection of Amendments is used much more drastically, and that the Chair cannot be expected to call manuscript Amendments unless it is quite convenient to do so from the point of view of the Amendments being easy to understand and to follow, and to realise whether they are in order or not, and also that the calling of them should not upset Parliamentary business or be generally inconvenient.
When an unfortunate state of affairs for the hon. Members concerned arises, such as that which arose to-night, I do not think that, unless there were special circumstances to be taken into consideration, hon. Members who were not present to move their Amendments when called should be allowed, as a matter of course, to get over what has happened by handing their Amendments in again as manuscript Amendments. I think also that it would be a mere way of getting round that general principle if the same hon. Members handed in similar, though not identical, Amendments, or if identical Amendments were handed in by other hon. Members; but if it is a matter which is of such interest to others than those whose names were attached to the Amendments that other hon. Members choose to hand in other Amendments, I think those ought to be treated by the Chair with considera-
tion, but, subject to the view of the Committee—and on that I will say another word in a minute or two—I think the natural course would be for the Chair not to select any Amendment of that kind, unless for very special reasons, if it meant keeping the House sitting beyond the ordinary hours. There are many reasons which are too obvious, perhaps, to go into. That is my view of the position to-night. There are yet two new Clauses on the Paper to be discussed, the result of which would obviously be that the time for unopposed business in the ordinary way up to half-past eleven o'clock would have arrived before any manuscript Amendment could be discussed, and in these circumstances, except for very special reasons, I think they should not be selected by the Chair. The Chair is entirely in the hands of the House but that means—and I think it must be taken to mean—that the occupant of the Chair would not depart from what he considered to be the proper recommendation of the House, unless the feeling to the contrary were almost unanimous or, at any rate, very widespread in all quarters of the House.

Brigadier-General Sir HENRY CROFT: In view of the statement of the Leader of the House that so far as the Government are concerned every facility will be given for the discussion of this question on the Report stage, and in view of the fact that one of the complaints would be that such an important question should be Debated at this time of the night, I would urge that any hon. Members who have Amendments down should consider that it would be far wiser to have on the Report stage a Debate worthy of a subject which interests the House so greatly. It is only fair to point out that this is a very unique assembly. Members may endeavour to make calculations as to when Amendments will bo reached, but there is an entirely new situation owing to the fact that His Majesty's Opposition are quite incapable of keeping the Debate going.

The PARLIAMENTARY SECRETARY to the TREASURY (Captain Margesson): I must point out that the Opposition in this case have met us in the fairest possible way. It is entirely through their good will that we have been able to carry out the bargain.

Sir H. CROFT: I am glad to hear what my hon. and gallant Friend has said and I accept it. [HON. MEMBERS: "Withdraw!"] I did not know—[HON. MEMBERS: "Withdraw!"] If there was an arrangement made, I certainly will withdraw any remark which has given offence, but it is legitimate to point out that we have seen Debates carried through much more quickly than has been usual. In view of the fact that the right hon. Gentleman has given an indication that this question so far as the Government are concerned will receive full consideration on the Report stage, I urge that the Debate should not be carried on to-night, because this is a question which affects the whole country—[Interruption.] I am not going to be shouted down.

The CHAIRMAN: Order!

Sir H. CROFT: On a question of this magnitude we are entitled to endeavour to impress upon our fellow Members its serious consequences. I hope the House will not make so grave a blunder as to imagine that this is not a question which is affecting people throughout the length and breadth of the land. Thousands of men have lost their employment in the last three weeks.

The CHAIRMAN: The hon. and gallant Member is debating the subject.

Sir H. CROFT: I hope that every opportunity for the case to be stated will be given on the Report stage.

11.0 p.m.

Mr. MACQUISTEN: As one of the culprits, I want to express my deep apology to the Committee for not being present. I ought to have been here, and I am not going to cover myself with a mantle of excuse. I was waiting to see the name on the board. I am sorry that I was not here. There are many people who want to hear all about this question, and it will be unfortunate for the country if we cannot have an explanation from the Chancellor of the Exchequer. But, if it is better to have it on the Report stage, let us have it then. It is very hard lines that six of us have missed the train. It may happen to anyone. I have no reflections to make against the Opposition. They are making the best of a bad job; and doing it thoroughly well; as well as can be expected. It is
most regrettable, but it would be most unfortunate if it was felt in any quarter that this matter had been smothered. I was interested in the Whisky Duty. No one can say that I have no interest in the Whisky Duty, but as the Leader of the House says that we are to have a full discussion on Report I hope the Amendment will be chosen and that the discussion will be in time for the newspapers—a very important matter. I really feel genuinely ashamed of myself for not being present.

Mr. CHURCHILL: I am quite content with the fair and just manner in which the Lord President has dealt with the point which I ventured to raise. I say "ventured to raise," because if one raises a point, in accordance with the long-established procedure of this House, one apparently is subjected to a perfect cataract of semi-incoherent insults from, the so-called Leader of the so-called Oppoposition. I do not rise for the purpose of raising the heat of the assembly. If I was not in my place, let me be scolded. But, after all, we have large matters of policy to deal with, and we endeavour to fit in our duties as conveniently as we can. I am entirely satisfied with the manner in which the Lord President has dealt with the question. I gather from your Ruling, Mr. Chairman that, although it may be in order you would not be able to see any hon. Member who rose to move an Amendment on this subject during the Committee stage. Very well, let us wait for the Report stage—and for the reporters. Before I sit down I should like to make it absolutely clear to His Majesty's Government, and to the Parliamentary Secretary and others, that we have never at any moment had a shadow of a suggestion of any want of good faith on their part or on the part of the Opposition; or of any attempt to sidetrack the discussion by hustling things through. It is most important that that impression should be cleared away, because otherwise there would be undue resentment. I ask leave to withdraw the Motion to report Progress.

Mr. BUCHANAN: In common fairness, after the Committee has heard so many people who have been absent, I think that I should say a word. We have spent some considerable time already in discussing matters arising from the Clause
which hon. Members expected would be discussed. The Report stage of a Bill hitherto has been considered the proper place in which to discuss matters which have not been thoroughly debated in the Committee stage. The Report stage should not be a convenience for Members who were not looking after their duty on the Committee stage. When the Report stage is reached, I hope that Members who have been present and who have refrained from speaking on matters in which they are keenly interested, will not be subject to loss of time because of the overshadowing importance of the Beer Duty or because of the occurrence to-day

Question, "That the Chairman do report Progress, and ask leave to sit again," put, and negatived.

NEW CLAUSE.—(Motor licence duties. Commercial vehicles on pneumatic tyres.)

Where a licence has been taken out in respect of any mechanically propelled vehicle to which section twelve and the Third Schedule of the Finance Act, 1926, and section six of the Finance Act, 1930, apply and during the currency of the licence the vehicle is entirely fitted with pneumatic tyres in place of solid tyres the holder of the licence shall be entitled to repayment from the licensing authority of a proportionate amount of the licence duty for the remainder of the year representing the difference between the rate of duty on a vehicle entirely fitted with pneumatic tyres and a vehicle not so fitted.—[Lord Apsley.]

Brought up, and read the First time.

Lord APSLEY: I beg to move, "That the Clause be read a Second time."
Most hon. Members have seen the progressive destruction of the roads by solid-tyred vehicles, steam lorries travelling at excessive speed and generally over the same stretch of road, often carrying the very materials with which to reconstruct the road over which they travel. I am sure that hon. Members would be only too willing to support anything which would facilitate the conversion of these solid-tyred vehicles into pneumatic-tyred vehicles. At the same time there is no doubt that there is considerable difficulty about such conversion. The owners are faced with one of those small economies which Whitehall is rather apt to indulge in, in order to save a few thousand pounds, and a great deal of annoyance is caused.
Under the present procedure, the owner of the solid-tyred vehicle who wishes to convert his vehicle to pneumatic tyres has first of all to surrender his existing licence and claim repayment of part of the licence duty. A reduction is made of a proportionate amount. But the owner does not get the full amount of the duty over the unexpired period. Further, he has to pay a fee of 10s. and go through a considerable amount of formality. As all owners of motors know, there is great difficulty and bother in getting licences at any time of year and after the procedure which I have described he has to take out a new licence for the remainder of the year, which is charged at a higher rate of duty. This Amendment is framed to enable him to take out a licence at any time of year and possibly my right hon. and gallant Friend would consider next year extending it to private car owners as well. The system of taking out licences is not satisfactory for people who use cars only in the holiday season, for instance, or doctors who use their cars for a short period and then lay them up. There is a great deal of unnecessary correspondence and the owner is "done down" every time, as far as money is concerned. I hope the Minister will give consideration to these points.

Mr. PYBUS: I quite appreciate the point of the Noble Lord regarding the importance of accelerating as far as possible the change from solid tyres to pneumatic tyres but I think that if he looks at the figures he will find that the present procedure allows that change to be accomplished and that in fact the object of the proposed new Clause is very well met under the existing arrangements.
For example in the case of a solid-tyred vehicle with an annual duty of £60, if the change to pneumatic tyres takes place at the end of the first six months the Member will find that the only loss in the existing system of change of licence as compared with the proposed rebate would be a sum of £l 14s. In regard to vehicles generally, it will be found that the difference is not serious. With that brief explanation I would ask the Noble Lord to accept my assurance that we will keep the point in mind and I hope he will see his way to withdraw this proposed new Clause.

Lord APSLEY: If the hon. Gentleman will assure the Committee, that the Ministry are taking the matter into consideration and that they will review in the near future the whole system of licensing in order to simplify it, both as regards heavy lorries and privately owned cars, I will ask leave to withdraw.

Motion and Clause, by leave, withdraw.

NEW CLAUSE.—(Allowance for replacement of plant or machinery.)

In estimating the profits or gains of any trade, manufacture, adventure, or concern in the nature of trade chargeable under Schedule D, there shall be allowed to be deducted as expenses incurred in any year so much of any amount expended in that year in replacing any plant or machinery which has been scrapped in that or any previous year, as is equivalent to the cost of the plant or machinery replaced after deducting from that cost the total amount of any allowances which have at any time been made in estimating profits or gains as aforesaid on account of the wear and tear of that plant or machinery and any sum realised by the sale of that machinery or plant.

Plant or machinery shall be deemed to have been scrapped within the meaning of this section when it has been destroyed or broken up or disposed of for a purpose other than that for which it was acquired. —[Sir B. Horne.]

Brought up, and read the First time.

Sir R. HORNE: I beg to move, "That the Clause be read a Second time."
The question raised in this new Clause is one of vital importance to industry at the present time and, in particular, to the shipping industry of this country. It concerns the allowances to be made against the profits or earnings in any particular year by reason of the fact that new plant has been purchased to replace old plant. In the ordinary way the allowances which are granted by the Inland Revenue Department, are based upon the view which may be taken as to when plant is obsolete. The ordinary rule which the Inland Revenue seeks to apply is that if an industrialist or shipowner, finding his plant or his ship obsolete, replaces it, allowances should be made against the profits of the year for the expenses incurred by the replacement. The difficulty, however, which is particularly felt in these adverse times, occurs in this way: The question arises as to when you may regard a particular plant or ship as obsolete, and it is
obvious that there may be great variations of opinion upon that question. For example, suppose that although a manufacturer has purchased quite recently an entirely new plant, but in the course of a few months or a relatively short period some new invention has been discovered which makes that particular type no longer effective in competition. Can that plant be regarded as obsolete or not? Or, again, if a shipowner thinks a new form of ship, let us say, propelled by a Diesel engine, is the only one which he can employ for a particular traffic, and decides to scrap the old ship, can the old ship, though still perfectly efficient, be regarded as obsolete? The Committee will understand the great difficulty of questions that may be raised in that particular category.
Again, with regard to the question of replacement, can an old ship or an old plant be regarded as replaced if a considerable interval of time elapses between the buying of the new plant or the new ship and the scrapping of the old plant or the old ship? Is it replacement if it takes place one year, two years, three, four, or five years after? Can that be regarded in truth as a replacement of the old plant so that the allowance which ought to be given should be given as against the profits of the year? The Committee will readily see how important that question is at the present time, when there are many people, for example, with ships which have been lying up for some time and which have become obsolete, but may not be replaced, because of the conditions of the time, for several years. When the shipowner comes to buy the new ship in place of the old with which to conduct his business when better times come, can that be regarded as a replacement so as to allow the shipowner to get the deductions for the profits of the particular year to which he would ordinarily be entitled? It is with a view to clearing up that very difficult matter that I move this Clause, and what I venture to put before the Committee is that it should now become part of the rule by which the Inland Revenue shall be guided in dealing with these important matters that—
In estimating the profits or gains of any trade, manufacture, adventure, or concern in the nature of trade chargeable under Schedule D, there shall be allowed to be deducted as expenses incurred in any year BO much of any amount expended in that
year in replacing any plant or machinery which has been scrapped in that or any previous year, as is equivalent to the cost of the plant or machinery replaced after deducting from that cost the total amount of any allowances which have at any time been made in estimating profits or gains as aforesaid on account of the wear and tear of that plant or machinery and any sum realised by the sale of that machinery or plant.
The difference which this Clause makes from the law as it at present exists is in using the word "scrapped" in place of the word "obsolete," so that there may be no discussion as to whether a plant or a ship has become obsolete or not in any technical sense, and again in providing that the replacement upon which allowance shall be made may take place not merely in the year in which the scrapping of the old plant or ship takes place, but in any subsequent year as well, provided, of course, that the replacement is a genuine replacement. The Committee will readily understand how important this is, because in the conditions of the present time it would be absurd and folly in very many instances for any shipowner or owner of industrial plant to replace all the plant that has been scrapped if he has not any opportunity of using it in industry for some time to come. When he starts industry again he should have the opportunity of replacing the old plant which he has scrapped. It is in order that the sale should be made to suit the facts that I venture to propose this new Clause which provides that replacements may take place not merely in the year in which the scrapping occurs, but in any subsequent year so long as it is a genuine replacement of new plant for old. I understand that the Inland Revenue contends that it has to a considerable degree mitigated the old and harsh interpretation given in previous Statutes, and that it is possible that my right hon. and gallant Friend the Financial Secretary may be able to give an assurance with regard to the interpretation which will greatly mitigate the fears and anxieties of the people who are attempting to carry on industrial and shipping business. If that be so, it may be possible for me to accept such assurances as he gives. In the meantime and for the purpose which I have described, I venture to move the proposed new Clause.

Mr. WARDLAW-MILNE: I want to impress upon the Committee the immense
importance at the present time of giving every possible advantage to those who are prepared to scrap old plant and to bring new plant into operation, which is a matter to which the House in various Debates in the past has paid great attention. This new Clause is to me, at any rate, a new interpretation of what has been the practice in the past. My right hon. Friend has indicated that from information which he has received it appears that the point is to some extent met by the practice of the authorities. All I can say from my own experience is that I do not think that view is generally held throughout the country. I do not think that it is generally known that an allowance will be given to the extent suggested in this Clause if the plant is in fact replaced in a year other than that in which it is scrapped. I suggest, therefore, that if the Financial Secretary can meet us in this matter he will do something which will have more effect in bringing manufacturers into a position in which they can compete with the best plants abroad than almost any suggestion that could have been put forward. I do, however, see a difficulty in the Clause as it stands in the inclusion of the words:
or in the previous year.
I do not want to put objections to the Clause into the mind of the Financial Secretary to the Treasury, but it is worth saying that if it is the view of the Treasury that there should be some limit, there is no reason why the situation should not be cleared up and a limited period given—that one should make it perfectly certain that the new plant put in is in fact replacement and that it was scrapped within the year, two years, or it may be five years preceding. The Committee should know clearly what is intended. If a manufacturer has a piece of plant or a shipowner a ship which is scrapped and replaced within a reasonable time by a new ship or a new piece of machinery he will then have the opportunity of adding, as it were, the un-recovered value of the old machinery to the new for the purpose of getting depreciation allowance in the expenses of the year. If the Treasury can accept this new Clause, even if they find it necessary, at this or a later time, to put some limit to the number of years, it would be an
immense advantage to manufacturers in all parts of the country.

Lieut.-Colonel SANDEMAN ALLEN: May I add my earnest plea to that of my hon. Friend's because I think that not only by the direct effect upon shipowners but by the indirect effect upon shipbuilding this change would enormously assist industries which are vitally affected in the constituency which I represent. There is no need for me to point out to the Government the tremendous asset that shipping is to this country. Our invisible exports are estimated by the Board of Trade returns for 1931 to amount to £80,000,000, while the exports of cotton textiles amount to £57,000.000. There are other figures which I could quote but I do not want to take up the time of the Committee.

Mr. D. G. SOMERVILLE: I support this new Clause, which I regard as a very important one indeed. Any plant to-day which is not the latest plant is obsolete. In the face of world competition we require the most up-to-date and modern plant we can purchase. Many firms, owing to the depression, are not in a position to purchase that plant; if they were to do so they would have to overdraw or reduce their resources for carrying on their works; but when the depression lifts, as we all hope it will, they may then be in a position to purchase the plant. An allowance would be made on that plant, not necessarily in the year in which it was purchased, but later. I hope the Financial Secretary will consider this matter and so assist the great engineering industry to equip their works with the latest possible plant.

Major ELLIOT: The request made by my right hon. Friend the Member for the Hillhead Division (Sir R. Horne) and those associated with him is one, I understand, for classification as much as a request that the Clause should be accepted. If the principle which they desire to see accepted can be shown to be accepted by the Treasury, they would be willing, I understand, to consider holding the matter over for a further stage. I think I shall be able to satisfy them upon that point. It is true that the rule as regards obsolescence has been closely interpreted, perhaps, in the past. "Replacing" was regarded originally as implying that there should
be a close similarity in function between the new machinery and the old, and it was originally held that the word "obsolete" meant that the discarded machinery should be out of date to be superseded by a new type. For a considerable time past the view has prevailed that, where a trader thinks proper in the interests of his business to discard one machine and replace it by another, the Revenue is not concerned to inquire too closely whether the machine is to be regarded as of a new and improved type as compared with the old. A replacement is a replacement, and it is for the trader to judge whether his machinery needs replacement or not. We of the Inland Revenue are interpreting the rule accordingly. Again, if it is desirable to replace plant, if a trader, with a view to greater efficiency, discards plant in use and instals new plant, a claim for the obsolescence allowance is not to be opposed by reason of differences in the character and functions of the new plant so long as the facts of the case do not lead to the conclusion that the changes which have taken place really amount to the discontinuance of one trade and the setting up of another.
So much for the general conditions of obsolescence. But the right hon. Member for Hillhead was more particularly concerned with the conditions as regards shipping, although his new Clause was of a general character. As regards shipping, it is clear that replacement must not be held too closely to be replacement within one year or even within a given period of years. The term "replacement" is to be taken as the essential act of replacing and not of replacing within a given time. "Replacing" is a reasonable matter which cannot be settled by reference to a term of years. It is almost impossible to put a definition to it, although we must exercise common sense as to when it is replacement and when it is reconstruction. The authorities in Germany, for instance, might consider that the building up of a new Imperial Navy similar to that of 1914 was replacement, whereas other authorities might hold it to be the reconstruction of an Imperial Navy. There are obviously points where it passes over from what is clearly replacement to a debatable stage and from that to what is obviously not replacement at all. If,
for instance, a shipowner during the present period of depression orders a new ship and takes his old ship out of commission right away, we should hold it no obstacle to a claim under Rule 7 that the shipbuilders did not deliver the replacing ship and that he did not pay for it until the year 1934 instead of in the year 1932. Nor would a claim be opposed because he thought it expedient to wait a considerable time before giving the order for a new ship. That deals with the question raised by the hon. Member for West Birkenhead (Lieut.-Colonel Sandeman Allen). But suppose a shipbuilder had a fleet of ten old ships in 1919, and found after a few years that they were nearly worn out. He decided to reduce his activities, and he ordered only four new ships and carried on his business with the four new ships. If in 1939, he ordered four more new ships to extend his activities and then made a claim for an allowance, it would be held that there was no real relation between the old ships and the new such as would reasonably be implied by the word "replacing".
We hold that, under a reasonable interpretation of Rule 7 such as is being carried out now, we can do all that the right hon. Member for Hillhead requires. We feel that the terms of the proposed Clause do not go any further than Rule 7 and that, if they were stretched further than the wide interpretation of Rule 7 which I have given, namely, that replacement might take place even several years after the scrapping of the previous piece of plant or previous ship to which the claim related, then replacement might be stretched beyond its proper limits. Now that it is realised that the shipowner can get his obsolescence allowance notwithstanding that the replacement of the discarded ship may be deferred for two or three years, or even longer, and that the only condition in interpreting Rule 7 is the essential condition that the acquisition of the new ship may reasonably be regarded as a replacement of the old one, I hope it may be found possible not further to press for this Clause.

Mr. D. G. SOMERVILLE: Will that condition apply to engineering plant as well as to ships?

Major ELLIOT: Yes. I am using the ship as an illustration, as that was the
case which was more particularly raised by my right hon. Friend.

Mr. DUNCAN GRAHAM: Will it apply to mines? There are mines which have been suspended for two or three years, and in such cases the owners would be put to considerable expense to put their mines into a condition in which they could produce otherwise than at a loss. Will they be entitled to relief under the proposals of this Clause?

Major ELLIOT: Not, I hope, under this Clause, but under the existing law, under Rule 7. They will be in the same position as shipbuilding plant; I was using that as an illustration, and not as an exception. Under the wear-and-tear provision there is an allowance in respect of the annual wear and tear of machinery; under the obsolescence provision there is an allowance for the replacement of machinery or plant which has become obsolete to an extent measured by the cost of the old machinery or plant less the total of any allowances already granted for wear and tear. Roughly, the effect of Rule 7 is that, where new machinery or plant is acquired to replace discarded machinery or plant before the end of its physical life by reference to which the wear-and-tear allowance is computed, a further allowance is given to complete the writing off of the cost of the old machinery or plant for tax purposes.

Mr. D. GRAHAM: Would a pit shaft be regarded as plant?

Major ELLIOT: That is a highly technical point on which I should like to consult my advisers. On these matters there are well recognised formulae agreed upon after many generations of industrial experience. We are not bringing in a new definition of plant. If plant has been defined in the past as including a pit shaft, it will be so defined in the future. Naturally, my hon. Friend would not expect me to give a ruling on such a point across the Floor of the Committee in answer to a question.

Mr. GRAHAM: I should like to be assured that, when the question is dealt with further, the mining industry will not be put in a worse position than any other industry. It is just as much entitled to put forward such a claim as any
other industry, though it would, perhaps, be more difficult to make it as clear to the ordinary mind as in the case of a ship or machine that has become more or less obsolete.

Mr. WARD LAW-MILNE: The right hon. Gentleman's reply is extremely satisfactory as to the procedure that is followed at present. Unless my right hon. Friend, the Member for Hillhead, desires to go further. I do not wish to press the Government unduly but I hope he will consider this point: that the procedure as followed in the way he has described is certainly not generally known and I would ask him to consider whether it is not necessary that the point should be made clear by some alteration as suggested in the words of the new Clause. I would ask him to consider whether the whole situation should not be made clear to shipowners and manufacturers throughout the country so that they may take advantage to the fullest extent of the possibilities under the procedure that he has outlined.

Major ELLIOT: Statements have been made to British Chambers of Commerce to that effect by the officials.

Mr. MAXTON: I do not wish to take up time as I understand, in accordance with the agreements, which have worked so well to-day, this is rather a little family party in which members of the Conservative party discuss their little hobbies across the Floor rather than an important part of the Committee stage. But I have been watching this discussion with very great interest. I understand the right hon. Gentleman the Member for Hillhead (Sir R. Home) and the hon. Member for Kidderminster (Mr. Wardlaw-Milne) are urging the Financial Secretary to make an easier interpretation of the allowances that may be made to big concerns in calculating what they are liable to in the matter of their Income Tax, and that certain allowances are to be granted on a more generous and easy scale than previously under Schedule D and the right hon. Gentleman replies that, while he is not prepared to make the concession that they are urging, he is prepared to interpret the existing Rule 7 in an easier way than it has been actually operated in practice in the past. That seems to me to be granting a relief of taxation to what are presumably the
most prosperous section of the community just now. Shipowners were only used as a type. I am sure the right hon. Gentleman the Member for Billhead did not know of any large scale proposals for scrapping obsolete machinery inside ships on the Clyde at present.
This Clause, if it operates, will be in favour of concerns that are prosperous and are doing well and making profits. We are told that concerns that are making profits at present are few in number. I do not know whether that is talk for the benefit of the oi polloi—the ignorant mob—but that is what we are told. Concerns that are making no profits, and those interested in them, are to continue paying Income Tax at the ordinary rates, but special reliefs are being permitted to those whose businesses are so prosperous that they can see the advantage of making replacements, and scrappings of plant that they consider obsolete. This is an economy Government. It is always telling us that we who are on the Opposition benches do not realise the serious nature of the crisis ahead. It has told us that no concessions can be made in any direction, that we must maintain taxation at its present level, and that we must still diminish expenditure in many directions. And yet, if I understand the Financial Secretary to the Treasury correctly, not by decision of the House, but by administrative processes in the Treasury, the reliefs for which the right hon. Gentleman and his friends are pressing are to be granted.

Major ELLIOT: Have been, and are being granted.

Mr. MAXTON: I should be loth to believe that our right hon. Friend the Member for Hillhead (Sir R. Horne), whom we both know as a colleague in the representation of Glasgow, is ill-informed about the operation of the Income Tax processes as far as the business interests of our City are concerned. He has brought forward this Clause because he feels that the present procedure has operated harshly and that it will make it operate more reasonably. The right hon. and gallant Gentleman, in reply, says that there is no need for any change, because the spirit of this Clause will be carried out by Rule 7. I leave my two colleagues in the representation of the City of Glas-
gow to make up their minds as to who is "having the other on," because if "Hill-head" is correct in believing that it is necessary to ease the operation of Rule 7, then "Kelvingrove" is not right in his interpretation that there is no hardship. "Hillhead" says there is a hardship, and "Kelvingrove" says there is no need for this Clause because we are making all the concessions for which he asks, and have been doing so in the past. I cannot believe that the right hon. Gentleman, a former Chancellor of the Exchequer not so many years ago, and a director of a great many very important companies, is so ill-informed. I think that I am correct in believing that the Financial Secretary promised the Committee that in the future these companies, which are making big extensions of plant and are prosperous, are to be treated with a consideration which has not been meted out to them in the past. I will not put it higher than that. I do not think that it is right and proper that concessions in taxation should be made by administrative action at a time when we are told that every half-penny which can be gathered in from any source is needed in the National Exchequer.

Sir R. HORNE: My hon. Friend the Member for Bridgeton (Mr. Maxton) very seldom misunderstands an argument, and accordingly I think that I must have put my propositions very badly since he has formed so complete a misapprehension of what I have suggested. He talks as though it was a proposal in favour of those who are prosperous. The contrary is the case. My hon. Friend and I may have different fundamental views, but we are seldom at arms in argument. I submit that prosperous firms have no difficulty in meeting the very strict interpretation of the old rules, for the reason that they are in a position to replace as soon as they scrap. I am not asking anything for the benefit of prosperous firms who have resources to replace that which has become obsolete. The people for whom I am appealing are those who are scrapping now or who scrapped last year and who are unable to replace now or next year or perhaps the following year or the year after that, but who are saying that when they make replacements these will really be as against the ships which they have scrapped now or even a year or two years
ago. They cannot replace now because they have not the resources to do it. When the new ships are built or the new plant is obtained it will be a true replacement of that which has gone by the board this year or last year or the year before. It is for the man who is down and out and whose resources are gone that I am appealing—not for the man who has got the resources to make immediate replacements. I hope my hon. Friend the Member for Bridgeton understands the fundamental basis of the appeal made to the Committee.

Mr. MAXTON: But this Finance Bill only operates for this year.

Sir R. HORNE: That is perfectly true, but, as the hon. Member very well knows, this Clause, once embedded in the Finance Bill, goes on from year to year unless altered. What does one do with regard to the Finance Bill? In any particular year one seeks to have a Clause put in with the hope that it will continue to operate as long as the same conditions exist. There are very few Clauses which get altered, and accordingly the proposition I am putting forward is one which I believe to be sound and which should operate as long as any of the conditions which we know to exist continue.
I now turn to the other point the hon. Member made. He has sought to put me on the horns of a dilemma, but the horns of a dilemma are sometimes very easy to sit upon. He says, in effect, that either you ought to have this new Clause or you are legislating by administration without putting it in the proper form in which it should operate. As I understand my right hon. and gallant Friend's explanation, it is this: As far as the interpretation of "obsolete" is concerned, he said that they had for a considerable time been interpreting it in the Statute in a more generous way than they did some years ago. I do not think that is legislating by administration, because, in fact, the Inland Revenue Department have to deal with things as they find them, and in the question of the interpretation of the Statute in times like these it is perfectly obvious that if they interpret the word "obsolete" in too narrow a sense they may very easily be defeating justice and defeating their own
revenue. They do not so interpret the Statute as to get less revenue than they would if they interpretated it in a more generous form. What the right hon. Gentleman said was not that he was conceding a new interpretation of the word "obsolete," but that the new Clause was unnecessary because of the interpretation which the Inland Revenue Department has been putting on that word for some considerable time. That is no new thing.
Then, with regard to "replacements," I do not think that that is legislation by administration in any unfair sense because the circumstances now are entirely different. The whole question is whether in interpreting the word "replacements" you allow replacements to be regarded in a reasonable sense in the circumstances of the present time, when they cannot occur owing to the conditions with which we are likely to be confronted for some years to come. It would be folly for a man to replace at the present time a ship which he cannot use. He has accordingly to wait for two or three years, and the question I put to my right hon. Friend is; "Will you interpret the word 'replacement' reasonably so that it will cover replacements in a reasonable sense"?

Mr. BUCHANAN: The point my hon. Friend made was this. Is not that being done now? The right hon. Gentleman is saying it is not being done now whereas the Financial Secretary says it is.

Sir R. HORNE: In regard to the question of replacement we are met to-day with an entirely new condition of things, which has prevailed for a long time. I do not suppose that anyone living remembers a period of such prolonged depression, when people are compelled to wait for such a length of time in order to manage their business in a way that is efficient. The prolonged gap that has occurred between former prosperity and the chance of regaining prosperity has raised an entirely new set of conditions, and what I am saying is that in these conditions if a man is compelled, say, to sell or to scrap a ship for old iron, if he cannot build his new ship perhaps for two or three years, he should be allowed by the Inland Revenue to count that as a replacement under the old rule?
My right. hon. Friend has said on behalf of the Inland Revenue that they will take that reasonable view, and I hope the Committee will support him in taking that reasonable view. Otherwise, the greatest possible injury and detriment is going to be done to trade and industry. I am indebted to my right hon. Friend for the interpretation that he has given of the action which the Treasury and Inland Revenue mean to take in regard to this matter. I thank him for his explanation of what has been their practice, although not very well known to everybody, for some time, and which required some illustration. I say "not known to everybody" because it does not come to one's knowledge unless you have to apply it in particular cases. I am thankful for what he has said, and in view of the assurance that he has given, and, bearing in mind that if any departure in practice is to be made in the course of the year, there will be an opportunity again to raise the matter, I beg to ask leave to withdraw the Clause.

Mr. BUCHANAN: No man within living memory can recall so many ships being laid up in the Clyde and elsewhere. In this matter we are considering a situation that no one would have thought 10 years ago or five years ago would have been possible to-day, and I would ask the Financial Secretary when he is giving wide interpretations to the Clause he should try to remember other matters as well. It is not only a new situation that has arisen. There is the question of men maintaining relatives under the means test.

The DEPUTY-CKAIRMAN: The hon. Member is travelling very far from the subject before the Committee.

12 m.

Mr. BUCHANAN: I am not discussing it. All that I am asking for is that in any wide extension of administrative power to deal with a situation that no one dreamt of a few years ago, a person who has to maintain relatives shall receive the same leniency and the same right that is granted to others. If he is showing this consideration to shipowners and manufacturers I hope he will show the same consideration to those people who are poorer than shipowners and shipbuilders.
I hope that this administrative consideration will be extended to those people who have to maintain relatives who are dealt with under the means test.

Major ELLIOT: The hon. Member knows that in the case of the maintenance of miners and their families during a trade dispute administrative consideration was given to cases which I discussed with him.

Dr. O'DONOVAN: There is one small point which I think is worth consideration. It is a human point. The more we encourage the scrapping of obsolete machinery and plant the fewer will be the fatal and non-fatal accidents. There is nothing more lamentable than the number of fatal accidents due to the persistence of plant and machinery which should have been scrapped long ago. There was the tragic occurrence recently when a tug which should have been scrapped exploded. Any stretching of the regulations by the Treasury which enables the scrapping of machinery to take place quicker would be for the benefit of human life and employment.

Question, "That the Clause be read a Second time," put, and negatived.

FIRST SCHEDULE (Customs Duties on Colonial sugar and molasses etc.), and SECOND SCHEDULE (Excise Duties on Sugar, Molasses, etc.), agreed to.

THIRD SCHEDULE.—(Scales of drawback on certain sugar and molasses.)

Amendment made:

In page 23, line 25, leave out the fourth word "the"—[Major Elliot.]

Schedule, as amended, agreed to.

Bill reported; as amended, to be considered upon Monday next, and to be printed.—[Bill 91.]

The remaining Orders were read, and postponed.

It being after half-past Eleven o'clock, upon Thursday evening, Mr. SPEAKER adjourned the House, without Question put, pursuant to the Standing Order.

Adjourned at Five Minutes after Twelve o'Clock.